Features like that can be dangerous because they are legitimately very useful during the app’s gestation, when exciting demos are a key survival trait; but then they can’t be removed later on because they’re so well-known, even if they turn out to be useless. Sometimes these features aren’t actually harmful to the user experience, they just make the code more complex and harder to maintain. Instant typing is both, unfortunately.
Jens Alfke, one of the developers of iChat 1.0, on real-time typing in Google Wave