To add to @tsl's excellent points, most people also don't realize how expensive a decent set of wheels actual costs. When they walk into the LBS and sees that the least expensive bike in there is well over $400 they think, well I've seen bikes at the department store for $150 and it looks just as good. What do they sell at these stores? That's right, hybrids and MTB's.

Hybrids have a place in my, er,.stable. I ride it to the grocery store and lock it up there. I ride it with my young children, and the littlest one needs a tag-along attached to my seatpost. I ride it to the park when I'm too lazy to walk there. But these trips are very short ones.