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From my POV google app engine is still the only PaaS offering that can scale the data-tier. Scaling the application instances is a lot easier and most other PaaS providers struggle with that too.

I think if you look at the big picture GAE is as good as it gets at the moment and there is quite a gap to the second place when it comes to automatic scaling.

Am I missing something? Disclaimer: we are very happy and excited GAE customers with https://blossom.io

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I'm a GAE user for a personal app -- basically I use it for serving comments on my personal blog, similar to whatever Disqus is doing but I prefer the control. I also built on it 2 other personal apps that I later shut down.

IMHO, GAE is great for quick prototypes. Even for apps built for personal usage is great as the free quota is still reasonable, and compared to shitty PHP hosting services it's heaven-like. As far as the free quota goes it's also a lot better than Heroku.

However, I feel very restricted on GAE. My current project at work that pays my bills would never fit into it. Even if it did, because of the stuff we do asynchronously and because of how Google charges for API calls, the bills would go through the roof.

    the only PaaS offering that can scale the data-tier

Yes it is. However, you can also scale the data-tier by yourself. Yes, it takes engineering, but it really isn't that difficult if you're planning ahead a little, which you have to do with GAE anyway. I think this old article from 2009 about how Friendfeed used MySQL to do sharding is a classic by now, but in case you haven't read it: http://bret.appspot.com/entry/how-friendfeed-uses-mysql

My biggest problem with GAE is that it is hard to migrate from when it no longer suits your needs. Not impossible, not extremely difficult, but difficult nonetheless taking away precious resources you'd rather invest in something else.

But as far as PaaS goes if you're in to that, it works great.