MySpace simply dropped the ball, more so than Facebook getting the better of it on their own. They allowed it to get bogged down with excessive advertisements, and failed to evolve once FB started making a push.
Regardless, I think it's a poor choice by Time. We're talking about something that was never intended, or expected to explode the way Facebook did. I know some will disagree, but I think a lot of Zuckerberg's success was pure luck. He created something in the right place at the right time, and had no idea it was going to end up being that huge.