In my opinion, the memorialization of a Facebook page, or the creation of a similar landing site on the web, is a reasonable supplement (or alternative?) to traditional funeral/memorial practices.
First, a virtual memorial is both cheap to create and relatively easy to maintain. Facebook does not charge for this service, and given that a user page is 'frozen' at the time of memorialization, there is really no effort required to setting up the site (yet the site is still capable of being dynamic, in that a limited group of people can write on the wall, post pictures, etc...essentially, information can still be added or removed).
Second, a virtual memorial is not constrained by real-world, physical limitations. A headstone can only capture the name of the individual, the crucial dates, and maybe a short quote or phrase. A virtual memorial, on the other hand, can be drastically more inclusive. The website could contain photos of the individual, quotes by and about the person, videos, music, etc.
Most importantly, a virtual memorial is far more convenient than a physical one. A virtual memorial can be accessed at anytime, from anywhere. It would be possible to "visit" the site for as long as you wish, or to stay for just a quick glance at a photograph or two. This virtual memorial may not replace a physical memorial (i.e. graveside/cemetery location), but it could definitely supplement a real-world memorial in an appreciable way.
While the idea of a virtual memorial website is certainly not new, Facebook creates the opportunity to dedicate one where this option was not so readily available in the past. Facebook eliminates the barriers and disincentives to creation of such a site.
Currently, the notion of a Facebook page for a deceased user may appear a little offensive or untimely. But, it will be interesting to see if these memorial pages are regularly adopted on a widespread basis. This could very well be a possibility, as our culture continues to evolve with an increasingly open mindset toward online social interactions.
After all, the interactive social processes surrounding the death of friend or family member are one of the most cultural and sociological aspects of the human experience. It is only a matter of time until they shift and blur into the virtual world, as has been the case for so many other of our daily interactions.