The Live Feed is laggy. Most of the time it's not up to date - and we're not talking seconds or minutes here, we're talking hours late, after which it suddenly gets updated all at once. Sure, I can still use the News Feed, but I prefer to see all of my friends' activity, not only what Facebook's algorithms chose as relevant. Perhaps I'm alone here, but the Live Feed is basically the most important part of my Facebook experience, and in its current state it's nearly unusable.
The thing about chat is that it must be reliable. You can exchange hundreds of messages without problems, but if even one of those gets dropped you'll be annoyed. Just like with web hosting, there's very little margin for error here; if the chat is not 99.99% reliable people are going to get angry. And currently, Facebook's chat is nowhere near that stage as far as reliability goes.