The concept of an ad-free social network could really take off as a backlash against the current norm of Twitter, Facebook, etc. Business and advertisers have completely invaded our personal connections.
I would be surprised if Ello gains mass appeal. It feels more like a designer's portfolio site than a social media site. The design and UI (user interface) reminds me of Cargo Collective, a popular portfolio creation service. Ello feels too designer-y, like it's trying too hard to be cool. I think most people won't "get" it.
However, it definitely could find an audience and gain traction among a certain user-base, which might be the goal. The new trend in social networking is specialized niche networks that cater to connecting specific demographics based on interests or commonalities.
Seems to me that Ello is catering to anti-mainstream hipsters who want to share their artistic filtered photos and latest gluten-free, vegan-friendly restaurant find ;)