Many before us have struggled to develop the "final" definition of the IoT and I've suggested that one day it will be unnecessary to argue over the precise terms because it will be ubiquitous. Between now and then, metaphors are very powerful.
Along this line of thought, I found this post by Dale Calder of Axeda Corp on the Forbes web site comparing the Internet of Things to Facebook insightful. He points out that "while Facebook is attempting to digitize and “platformize” every Internet user in the world (currently more than 2 billion people), the Machine-to-Machine market is doing exactly the same with all of the world’s machines, devices, and real-time information sources – over 7 trillion potential targets and counting." Every machine or device will have the potential to be at the hub of its graph.
The connection from inanimate objects to social ones is one that has been made before when developing the concept of IoT. For example, WideTag connects objects and/to people. The graph, however, does not need to be social to be valuable. It just needs to portray active (or dormant) connections in logical hierarchy. Or perhaps without any hierarchy.
Comparing the Internet of Things with very large, distributed systems is helpful for architecting suitable infrastructure. Could we compare the sensors deployed in a city with those in a nuclear power plant?
One thing to keep in mind is the potential for information overload. Reminds me of the problems facing physicists and IT experts when building the Large Hadron Collider. According to this article on ReadWriteWeb, "NoSQL solutions are designed to handle large numbers of transactions. CouchDB, for instance, has been used to power the web based IM client Meebo, proving it can handle a rapid influx of data. CouchDB is also specifically designed for distributed environments."
Another thing to consider is bandwidth. Calder points out in the Forbes piece that the traffic from all these sensors could become the single largest user of cellular airtime. Clearly, the network equipment providers and network operators are developing new protocols and procedures in order to offer appropriate products and services.