I beg to differ. Why 2006 is any different for web 2.0 I cannot fathom. I'd say it has more to do with generating hype for Time than anything else.
Wasted opportunity. Shame.

An excellent article poking similar criticism can be found here.
 

I don't think that Time is too concerned about whether it was 2005, 2006 or whatever. In fact its claim extends to the Information Age rather than any particular 365-day period.

Wasted opportunity to do what exactly? Would it have been less wasted had Al Gore or Jose Manuel Barroso been given the award?

Incidentally Time says that it received nominations for Sacha Baron Cohen. I would have been thrilled had he got it instead.