Most people don't have ongoing location discovery needs that would cause them to consistently engage with location based apps and services. People find the things that are compelling to them and then they tend to move on. People who live in cities, often the prime target for LBS, are often well aware of lots of great things to do around them.<p>Prime candidates for ongoing engagement with LBS are: people who travel a lot, people who are hungry for new and interesting stuff but don't know where it is , and people who are new to city (even here engagement will be limited).
The glass is half-full ;-) but here's the thing, location is just a feature that enabled more interesting apps. Building your app/business around location alone is not enough to keep people using your app.
I've been wanting some way to figure out what things people LIKE ME are doing that are trending right now. If there were people checking into bars all around NYC tonight with tags like "crowded" or "the hipsters are out" or "popped collars" or "quiet" or "divey vibe", I would be paying a lot more attention.