Kevin Jardine has a good summary of "What Elgg gets right" (via Dave Tosh). He writes in detail on the following points:

» A user-centric rather than content-centric approach
» Tags
» Access groups
» Aggregation
» Theming

Jardine concludes,

Elgg gives individual users unprecedented power to define their own personal spaces and to find people like themselves in a potentially huge member base. This creates an enormous shift from traditional content-based sites to new user-based ones.