Install profiles are basically "recipes" for Drupal installations. They detail what modules should be enabled and how they, and the system, should be configured. Install profiles are necessary because Drupal has hundreds of modules. The Drupal culture's ideal is that a module should act as a flexible component: most useful when interacting with other modules. Because of this, Drupal's modules can be combined to create complex, varied web applications.
Install profiles have the potential to eliminate the need to have a Drupal specialist select appropriate modules and configure a Drupal installation. They allow Drupal to offer not just the framework, but the end result.
The democratization of development is a natural next step for Web 2.0. Drupal install profiles are disruptive because they provide an avenue for non-programmers to create and distribute Drupal configurations that have functionality on par with existing open source applications. This has been Ning's goal, but Ning is a closed environment and has has limited success.