I teach classes on how to ride Segways (I work for a public museum, and have no commercial connection to Segway), and have put quite a number of miles on them.. Its true that they have no 'brakes', since they never coast. The wheels are always under directly motor control, and the ability of the motor to resist is greater than the traction the wheel has with the ground. You can quite easily convince the wheels to skid stop or even spin backwards and peel out while you are moving forward. They can stop incredibly fast, faster than you'd expect by looking at one.
In that sense, they are safer without brakes. If you really did 'hit the brakes' you would just fall on your face, in order to maintain balance, you MUST keep the wheels under direct motor control at all times. If you ever ride one, this will become apparent to you. Unlike a fixed gear bike, however, traction is always constant on the wheels, because you are never shifting more weight onto or off of a given wheel like you do when slowing on a bicycle.
In terms of their practicality... Well, I don't own one, and I don't think I ever will. The place that they make the most sense is indoor locations where people do a LOT of travelling around, like warehouses and factories. Not everyone is in perfect health, and not everyone should be expected to walk 20 miles a day inspecting a manufacturing line. Segways make a lot of sense for those places.
They also make sense for postal carriers, who by law, are only allowed to carry 20 pounds of mail (OSHA requirements). The Segway can carry over 100 pounds of mail, and move faster than the carrier can walk. Plus, they go anywhere you can walk (unlike a bicycle), so still handle all the porches, tiny walkways, and sidewalks that you don't necessarily want filled with bikes.
The other group that Segways make a lot of sense for are people of limited mobility, but who don't need wheelchairs. You all take it for granted that you are of good health, but my friend was partially paralyzed by an accident when he was a child, and can barely walk. However, he can stand comfortably, and can safely operate a Segway. He bought one, and some other friends are making a rack that lifts the Segway into and out of his van for him. He's ecstatic about the possibility of going to the hardware store all by himself for once. There is a huge group of people who don't feel that they are so 'crippled' as to need the emotional baggage of a wheelchair, but who have very limited radii of walking who benefit a LOT from Segways.
I admit a lot of people seem to buy them as fancy toys, or to go get their mail or something, and that isn't what Segway intended. Of course, people do it anyway. Personally I think they are fun, very interesting technology that it is worth learning about (since it has lots of applications besides Segways), and very useful for some people and in some industries, and its silly to just make fun of them. Maybe that 'dork' you saw riding his Segway to the convienence store has a disease that prevents him from walking very far? You don't really know..
Anyway, back to the brakes thing... Segways are 'fixed gear' like your bike, and slow down the same way a brakeless fixie rider slows down. But because the wheels are side by side, traction stays the same, and resisting is the fastest possible way to slow down, a mechanical brake would offer no benefit whatsoever, and would in fact be dangerous to use.
peace,
sam