You're arguing technical merits, not user benefits. It's the 'set once' part that's the trick. It's really, really fucking hard to get someone to set something new one time, even if it is a good bit better.
Personally, I wouldn't start using a new tool for the benefit of the web in general when there's an immediate benefit to me for using a competing product. There's got to be a user benefit besides improving the web.
Whats your immediate benefit, as a Twitter client dev, to register for bitly and get an API key rather than just posting to isshort.com/api.php?
You're confused about who I consider my user. My target audience is a developer, not an end user. The web page is only there as a demo; the product is the API.
Developers who use bit.ly don't see this as a problem - they like bit.ly because it can give them some intelligence into who uses their products and what they are linking to.
Publishers would like people to use their shortener, but that doesn't give developers anything.
Most consumers don't care. Some do, and prefer bit.ly because they trust it (and they like the intelligence it gives them)
