I can't understand those who talks down on Skyteam either. There is nothing wrong with the member airlines in Skyteam. United and USAirways are not much better than Delta / Northwest. I actually prefer Delta / Northwest over United and USAirways anyday and I am a *G. Lufthansa is very similar to Air France / KLM. What's wrong with Czech, Aeroflot, and China Southern? *A has Egypt Air, Air China (worse service than China Southern), and LOT. So every alliance surely has good and bad members.
I don't get it either. Maybe you could argue SQ is the bee's knees, but the US and European airlines in SkyTeam are pretty much indistinguishable from their *A counterparts when it comes to quality.
While I might have preferred MH, I'm willing to give Garuda a chance. Garuda makes a lot of sense for the reasons you noted and if they are as good as you say, then I will be happy to fly them. MH is an economic basket case, and is in the midst of a restructuring. I doubt any alliance is looking to take on that kind of uncertainty - do you want to fill a whole with a carrier that may be dramatically altering its operations?