In a nutshell, MySql is free. Is it great? Hell no, but it's free. The only deep understanding of human nature or the DB marketplace one needs to comprehend here is that given the choice between something great and expensive vs. something mediocre and free, the overwhelming majority will go for free.
MySql has always had huge problems preventing it from being accepted in the real "enterprise" marketplace, but most of us aren't in that market. Most of us need to yank a bit of data and cram it into a web page moderately quickly and as cheaply as possible. MySql does this quite well.
What doesn't MySql do well? For starters, it's much slower than Oracle, MS-Sql, and even Foxpro. It has no row locking, no transaction support, and minimal cross-platform compatibility. But, it's free and it works more or less ok on Linux.
Perhaps the real truth that Oracle fears is that eventually DBAs will come to realize that 99.9% of their storage needs aren't so "mission critical" as they would like to believe. I mean really, how many people out there can truely justify the cost of a full featured, robust database like MS-Sql? 10%? 5%?
For the rest of us, a free - albeit slightly dodgy - solution will work fine.