I think both of your points about RSS apply. Whilst I love RSS, many people that I collaborate with on Twitter don't use it, or use it sporadically. If I want to assign a particular tweet to someone to reply to, i want them to be aware of it immediately so they can action asap.

It would also be useful to send a message with the notification, possibly advising them on how to respond or suggesting things to say.

In terms of the subscription model, i guess it depends what route you want to go down. For me, this would be a fundamental use case and I know other services currently offer this for free (e.g. CoTweet).

Your UI and search facility are great, but the notification element is crucial for me.