My step-sister spent years fighting cancer. I knew this, and would talk to her occasionally, but I wouldn't find out about significant events until after the fact.
As soon as I surrendered and finally joined Facebook, I discovered she was in the hospital again, and was able to go visit and spend some quality time with her. As it turned out, it was the best conversation we ever had, the most time I spent 1:1 with her before she passed away.
Are there other ways of keeping in touch with family? Sure. Once your family is invested in using Facebook, however, that's where you have to be to know what's going on all the time.
I dislike Facebook, and look forward to getting rid of it. I cannot, however, dismiss the unique value it offers.
The only other means of communication which might have led me down the same path on that occasion was a family message board on QuickTopic.
However, frankly, Facebook is much better, for a wide variety of reasons. The message board was never ideal, privacy was a binary choice, people regularly struggled with it, photo sharing was a joke, etc. It's not at all obvious that the short hospital stay would have been communicated there.
Email, phone? Nope, wouldn't have happened.
Has Facebook displaced other communications mechanisms? Sure. But for the most part, the alternatives were far from ideal. Facebook has won by being better.
It's just unfortunate that they aren't satisfied with being a good way of keeping in touch with friends and family.