Here are some reasons why I think that a hybrid is not a waste of space:
1) My commute to work is mostly on roads, but also crosses a dirt path (cuts off a significant portion), roads under repair, and sidewalks/pavements/grass to get to my building through the middle of campus. A mountain bike is simply not efficient enough for my mostly road commute, and a road bike will not make it through the non-road portions of the commute.
2) I have to worry a lot less about the way I go to work. Whatever the surface I may likely encounter, my bike can handle it. I am not going to encounter terrain that will require mountain bike capabilities.
3) I prefer to take the hybrid (with its rear rack and occasional milk crate) on errands to the post office, store, for recreational rides through the restaurant area, parks, etc.
4) I prefer the hybrid's more upright position in heavy traffic on the way to/from work.
5) Since I have a hybrid, I don't have to even think about putting anything extra on my road bike (racks, etc.). I suspect the same people who think hybrids are a waste of space would be the first to ostracize someone who puts a rack on a road bike.
6) Having a hybrid, I don't have to leave my nice, relatively expensive (at least for me) road bike outside at work or at the store. It would suck to get the hybrid stolen, but it would suck a lot more to get my road bike stolen.
7) I can take my hybrid when I go camping in national/state parks, when most of the riding is on pavement, but sometimes may be on hard packed trails, gravel, wood chips, etc.
8) I have no interest in hardcore trails or mountain biking. If I did, I would get a mountain bike. I have no expectation to be able to use the hybrid as a full mountain bike.
I guess what it comes down to is this: If you think of the hybrid as a bike that's trying to do it all, it will always be considered a hopeless failure. I don't need to use the hybrid as a road bike - I have a nice road bike already. I don't need it to go over roots and tree stumps. I just need something that is relatively efficient on the road at a moderate speed but on occasion will handle other terrain like gravel, dirt, unrepaired roads, grass, or sand.