Hank Williams has an interesting piece about the current web development industry as an actual business model.
I definitely agree that adding value and charging your target niche for that extra value makes more sense than trying to please everyone and counting on the viral effect to make it big.
This kinda goes with this little rant I've thinking about for a bit: lately it seems that everything is a copy of a copy of a copy. You can really see it when the same things shows up in every RSS feed, as if people couldn't find better stories to report.
I personally first got on the web because I was interested in japanese animation (I was into Pokemon at the time - yeah I didn't know better, bite me) and magic tricks (card sleights, specifically). I didn't get on the web because I cared about the latest games, Palin bloopers, Facebook or whatever other viral thing you can think of. I think it's time to bring all the work we've been doing with mashups to meet the world of subcultures and personal interests. And by that, I don't mean reinventing the wheel by trying to tie Google Maps or some other trendy API with <insert niche here>, I mean really knowing your niche and adding real value.