Most of the common tasks can still be done with text-based console applications. I myself read my email using pine (some of my friends still use elm) and follow Internet's news groups with strn. In addition, I use only console applications for playing music on the background, and I edit text files mostly with Emacs on a virtual terminal.
In fact, I am more productive on a computer without all the "must have" things of a modern desktop. I do not spend time on playing online games, and I spend a lot less time surfing on the net. All kinds of applets, clocks and widgets don't disturb me and interrupt my thinking and writing. Unfortunately, IRC is just as addictive in console as when I'm using a graphical desktop environment.
One more reason for using the console applications is of course the "geek factor". Console applications wont probably make you especially popular among the members of the opposite sex, but using text mode IRC-client Irssi earns you certainly more geek credibility than using some GNOME or KDE applications for chatting on the Freenode.
I would not install a text mode Linux for the average user, but the geeks among us should certainly think at least twice before discarding the idea of using command line only with an old computer. Living a month in text mode forces you to learn more about UNIX and Linux than you would learn in twelve months of latest KDE. In 30 days, you would be a real power user!