I'm not a Ubuntu user and are not connected to Canonical in any ways. I have it tried once and deleted it a few weeks after. (It's not my style of distribution; I guess I'm too used to the old-fashioned Unix way, being a (literal) grey-beard Unix user since 1984 and a Linux user since 1994.)
But even I can see the value that Ubuntu (and Canonical, by paying the salaries of Ubuntu developers) provides to the Linux community: Packaging code into a coherent and *nice looking* whole, targeted towards desktop usage, that appeals to new users that have never used Linux before. And for that target audience their distribution is better than Debian or Red Hat, and arguably better than SUSE or Mandrake. In my book, this is a big win and a big contribution for the Linux community.
If they don't contribute code upstream to core infrastructure projects in addition, too bad. It mostly irks the developers in that projects; but other members of the rest of our community might see that providing packaging and user attraction (and also marketing) is a value in itself. At least, I do.
(To put that into context where I'm coming from: I use Debian, Red Hat, Slackware, and SUSE (in alphabetical order :), and almost all other Unix systems. As a developer, I belong to the TeX development community, and am active there since 1982.)