Web Gallery is the one thing I'll really dislike losing. Having the ability to upload photos to it right from iPhoto, and movies up to it right from iMovie, was very convenient and allowed friends and family around the world to see photos and videos of mine all in one easy to use place. It's obvious that I'm in the minority when it comes to using this service, and most likely don't care about sharing photos and videos with family members and friends, but it was well integrated into iLife and it made it easy to do. I guess Apple will have to erase those features from iPhoto and iMovie and replace them with nothing.
Facebook is now the medium of choice for sharing photos and videos. They made it so simple that everybody is using this feature. It used to be only for the most technically inclined to get your galleries on the Web. Facebook made it possible for most technically challenged. Like it or not, Facebook killed all other companies' attempt to hold any significant share in that "market". Apple doesn't want to expend resources on something that will compete with Facebook but will bring no significant revenue. I don't blame them - it's a smart way to do business. Google will be chasing all these "opportunities" notwithstanding low potential revenue streams. That's why everything that Google has is in Beta except their search, ads, and a few other products.