It will likely be a better engine than embedded Chromium when it's done (if for no other reason than that it seems to have fewer dependencies[0]), but I wouldn't start building an application on top of it today.
I am highly interested in finding a more performant alternative to Electron. I'm currently building a web-first game that will also be available as a fully offline native app. I'll probably use Electron unless the ecosystem changes drastically before I'm done. Some really interesting projects out there -- not just Servo, but also thin wrappers around OS web views, even a few re-implementations of CSS/HTML that just force you to cross-compile or port your Javascript to another language.
But I haven't found any that were mature enough that I felt comfortable using them. Servo was the most promising project I personally have seen so far, but it needs more time.
[0]: https://gist.github.com/flibitijibibo/b67910842ab95bb3decdf8...
Even if that effort has changed focus, the community now has Rust and I don't think we've seen such a fresh language paradigm since we got Lisp, Haskell, Ocaml, F#, Scala...
In which case, the world has benefitted from browser competition as a total side-effect of competing with the incumbent browser; we got the various evolutions of C and C++. Exactly the same way we got V8 and then nodejs and the whole server-side rendering paradigm with React and JSX.
If we all fall back to Chromium for everything, then Google has achieved a Pyrrhic victory. They need a disruptor to up their game... and it isn't WASM either.