I thought Gowalla was a beautiful app for the Palm Pre at the time. I was switching between that and Foursquare. In the end Foursquare won me over because of their dataset. I didn't have to constantly create new places to check in.

I think if they'd pivoted into something different where they focused on "seeing through your friends eyes" like the OP mentioned I think they would have been better off even if they'd failed. I did enjoy using the app but I could tell pretty quickly that playing the check-in game race was a losing one for them.