Yahoo mail is better for me because it implements the use of tabs, making e-mail multitasking a breeze. Also Yahoo's UI is more compact and less wasteful of screen real estate and just feels snappier while Gmail feels sluggish even on modern machines.

So yes, there's definitely room for Gmail to evolve beyond just barebones sending and receiving emails, as there's dozens of other companies who can do that just the same or better, because otherwise why use Gmail beyond the Google brand name, network effect, and integration to the wider Google-Chrome-Android ecosystem which is it's biggest strength and selling point, but as a stand alone email service it's pretty lackluster and unimpressive.