Jon from Splitwise here. Yep - we don't include interest rates or try to price debt transfers, because we want to keep things casual. The "debt simplification" is an awesome feature but is not on by default because some people have differing levels of trust with different friends.
We do send monthly reminders to make sure people are good about either paying back or picking up the check next time. People often just use it to keep track of who should pay next and that is the way I primarily use Splitwise personally. With good friends, Splitwise is just a way to let our balance roll and figure out who should pay today.
With more distant or very diligent friends who don't like being in debt, they settle up right away and like the monthly reminder emails. To each his or her own!
We have our API just for things like this. I actually have personally borrowed money with interest (a large amount to pay off a credit card) from a friend, and tracked the debt, payments, and interest on Splitwise. We did repayments via PayPal and I added interest each month using my own calculations. We were both very happy and it's been paid off for a while now.
If someone wrote a general Splitwise interest-on-your-balance app (I would make it be opt-in for friends who agreed, with 0% still as the default for balances) on our API, that'd be awesome.