IMO FCP never has been more versatile than Media Composer. Both have their pros and cons but speaking in complete generalities I don't think FCP has ever measured up to MC. I think FCP can get your 90% of the way there for a fraction of the cost and that's been a big part of it's success. People bought Avids for $25k, $80, $120k depending on the model and I don't think many people would be willing to drop the same cash on a FCP setup. The most attractive part of FCP/FCS has always been the price, IMO. It's so cheap you can't not try it out. Almost every post house I've ever been in has had a machine in the corner w/FCP installed just to see what all the buzz is about.
IMHO FCP out of the box wasn't the thing. It was what third parties allowed it to do. FCP was like a PC of editing world. Stuff like AJA Kona IO allowed you to do uncompressed capture and editing on-location with laptop. Something that couldn't be achieved with AVID without racks of hardware. Several other third party providers came up with their offerings which made FCP very flexible and as some people say better alternative to MC. You had AJA Kona, Pinnacle, Black Magic working on FCP so you really didn't have shortage of solutions in a time which AVID was trying to battle FCP first with AVid Xpress and then with lowering prices of MC.
Apple has always been on their own timeline, but their advancement w/the ProApps used to push the pace more than it does now. It used to be just FCP ($999) and Cinema Tools ($999) then DVD Studio Pro and Soundtrack appeared as stand alone apps. Later Compressor and LiveType showed up, FCP 4 got a huge, and free, .5 update that added native support for DVCPro HD. Which was huge because for the first time you could edit HD w/o needing a big, expensive RAID. Motion got released after that and Apple offered the Production Bundle (a suite of all the Apps for only a bit more than FCP used to cost all by itself). Not to mention Shake was purchased by Apple which turned a lot of heads. Back in these days ProApp announcements got prominent placement on Apple's main page.
FCP is the crown jewel but I have never really figured out how Live Type and Soundtrack fit in the picture. I think the problem is that all of the titles are brought out from third parties and then tried to be shoehorned in to one suit. I think the biggest WOW was the purchase of Shake. It could've been huge. There were also exceptions for Apple to release true Avid MC killer, a turn key editing system (Final Cut Extreme) However, in 2006 NAB there was FC Extreme nowhere to be seen.
Color was probably the last big splash that Apple made. Final Cut Server remains a very niche-type product that is much more geek friendly than user friendly (I only have limited exposure to it though and haven't used 1.5). Less glamorous things like ProRes and making the Media Manager more reliable (but still short of Avid) help the product feel more mature but when I look at what Adobe and Avid have done in the last 2-3 years I feel like Apple has almost been coasting.
Its not like "Apple has almost been coasting"... Its exactly what has happened here. Shake got axed but we haven't seen the replacement. We still haven't seen the ultimate integration of hardware and software (and we know how Apple likes that stuff) aka FC Extreme. FCP server has had more then its fair share of problems however, I haven't used 1.5 so it might be OK now. FCP itself feels like it only got few tweaks with 7.0 which to me was more like a point update then real upgrade. FCP could've used the RED integration to their full extent but unfortunately this wasn't the case. Compare this with the free FCP 4.5 upgrade turning FCP 4.0 into FCP HD and it shows how far the Apple has fallen from the tree.