At the time, Blogger seemed sufficient, especially since it was the most well-known one, and everyone I knew seemed to be on it. That it was owned by Google meant that I hoped it would keep getting better all the time.
I must say I am disappointed. As I've blogged more, some of the other features of blogging that I'd love, most importantly, blog categories haven't been added to Blogger. I've already posted over 150 entries, and I'd love to be able to (natively) categorize these posts as I write them. I've mulled over hacking something with Technorati tags, et al, but I'm too lazy to do it.
Another very helpful thing would be stats. My site is not very widely read, but it's still nice to know that there are people out there who like to read what I write (heck, everyone needs a little ego-massaging now and then), and there's no way for me to know how many people subscribe to my feed, since the site meter only tags the site visitors.
Lalit's already canvassing me to move over to MSN Spaces. I don't want to yet, but a migration tool might make it tempting for me. There's already migration tools for blogger to wordpress (there might be stuff for typepad too, haven't checked).
In addition, things like better templates and ways to organize links (there's only so much HTML hacking you can put up with), plus an easier way to get photos on your blog (admit it, the hello! route is the pits).
Blogger was once the pioneer, boldly going where no blog tool had gone before. I wish they'd get back to those ways again.