There are potential uses for computers that have been put on hold because the processing power hasn't been available. Some functions can be accomplished in a completely different fashion just because (for example) it can be relied upon for the host machine to have 2GB RAM.
It's not necessarily a case of just getting more eye candy in new software. It is annoying when that happens, admittedly.
There are other downsides to increased system resources. Users tend to waste them as well. The size of the average systray icon collection is increasing with new customers' machines that I see. The 1GB RAM mark seems to make my life more difficult :-)
I'm sure similar things were said about passing the 100, 200, or 500MHz barriers... "why do we need that much processing capacity?"... "who's going to use this then?". Sadly, the reason tends to be Windows, rather than increased application capability. Games seem to be the only real signs of the hardware frontiers being pushed. I think we're just as unproductive as ever.