Is it worth the initial fee? Certainly, if you are really good at Draft (it's possible to never pay for any draft beyond the first one you use to get started, you just need to be really good at drafting or get good packs). In other words, casual magic players are better off sticking to freeware.
Is it fun? If you can build a solid friend list, yes. But playing with random people carries a strong risk of running into jackasses. People on MTGO are more prone to disconnecting if they would lose a single game (or even playing against a mono-Blue deck) than they are on Cockatrice (although that has actual server issues). Not as bad as MWS, but still really bad.
If MTGO were Mac compatible without me needing to emulate Windows or instal Windows 7 directly, I would debate getting back into it for some of the features that MTGO has that Cockatrice lacks (namely Vanguard, Planechase, and Archenemy, which are tedious to do in Cockatrice). But that's because I have an existing MTGO account (forgot the password years ago) and have several cards that would be high-value today (allowing me to build a mini-collection).
If you are strapped for cash, or if your local playgroups don't also play online, I don't recommend MTGO at all.
I really should start a Cockatrice thread and see how many BGers I can get to join up so I have a legitimate reason to use my friends list...