What a great question...
I'd say we're in the early stages of what many call the "age of the customer" as people are just starting to understand what it means to be the ones in control [most companies are even further away]. Social has just started.
However there is a major issue that you see from the largest brands down to the individual webmaster talking here at Site Point and that's the attempt to use the this bold new method as a traditional channel. Every time you see a company telling people to "like" them to get offers and discounts, but never interacting, it's not social. Every time you see a twitter account that has 90% broadcast posts, that's not social. Every time you see a webmaster asking how many backlinks they get from doing social, it's not social.
This becomes clear when you see the term "social media". As a buzz word it's just fine but the word media has no business being attached to social.
Social is not a replacement to "advertising" or "marketing" because it's not a tactic, it's an approach. Your company doesn't "do social", your company changes how it does business to reflect a relationship with the customer. It doesn't live in marketing because marketing is not the expert, marketing is not the touchpoint, but rather marketing is responsible for educating the organization on how to open up and use engagement to actually effect service and product so.
So long as people measure in how many fans they can collect and how many impressions they'll drive, the opportunity is going to be missed. Social has a clear impact on business with many ways to quantify the importance but it's not in seeing if you can get a cheaper impression than TV.