Photoshop is for a lot more than just photo editing. It's a full featured raster image editor. You can create any type of graphics with it, not just edit photos. In fact, there is a special edition of Photoshop, called Photoshop Lightroom, for those just interested in editing photos (OK, you could get by on Elements too). Photoshop is used by all kinds of graphic designers and artists. It's used by professional illustrators to create digital paintings; it's used by graphic designers to combine any combination of rendered 3D graphics with hand-drawn 2D graphics with photos with texts, such as in a magazine ad layout; it's even used by law enforcement for digital forensics.
I don't know why you can't created rounded corners in Elements, but if you want alternatives just to see what else is out there, Fireworks is commonly used for designing web graphics, layouts, and creating wireframes. Alternatively, you could try vector imaging programs like Illustrator or Inkscape, but they're not suited to web design IMO (though for diagraming and wireframing they're great).
The bottom line is, your use of a graphics editor is likely different from my use of a graphics editor, even if we're both doing web design. You want to be able to lay out type, create rounded corners, slice images, and create wallpapers (what does that mean and entail?), while for others just being able to position/align text and graphics using rulers and guides is enough. Meanwhile, more advanced graphic designers require more than what you need and expect to be able to create more involved designs (take a look at popular web design galleries on the web to see what's out there).
So most image editors try to include the most commonly used features by all users. That means that no matter what program you pick, there will be features you don't use. All that matters is that nothing you need is missing. And frankly, it makes sense that a general-purpose image editor can also edit photos. Photos are just a class of images. And think of all the movie promo sites, band websites, photographer websites, designer websites, etc. that have photographs embedded in their layouts. Besides, most of Photoshop's features/tools are not specific to photo-editing anyway. It's not like there's a red-eye removal function or a sepia-tone filter or the crap you find in coin-operated photo booths.