i have a variant on the .me domain extension and have used it for my free hosting website since the .com and .co.uk domains went long ago
But, how many search engines still matter these days? If the top 4-5 don't make such discriminations, all's fine. Personally, I don't think that penalizing sites based on the TLD, owner's location etc would make sense for a search engine. Excellent content can come from anywhere.In my mind, I think a lot of search engines might still discriminate against extensions like that in providing them with good search results listings...
I am not a major fan of other countries' domain extensions )I think there is lower value in them). However, ".ME" (for Montenegro) stands out from the likes of ".LI" or ".CZ". There is obvious motives and owning "JohnSmith.ME" or "Host.ME" could be very cool. An underlying factor is the cost - what does it cost every year to maintain (I haven't found out that information just yet). But I certainly think there is value in big generic dictionary names. Worth the risk.
I definitely think with proper marketing and a good idea you could go far as they are cute and could be catchy, but for the average user it could not be worth the cost (depending on the cost and difficulty acquiring one).