The Creating Passionate Users Blog has a good blog entry titled: Don't give in to feature demands!
But when we've blended all the colors into one muddy blob, then nobody hates us, and nobody is delighted, excited, or turned on by what we do. We become mediocre. Usually the worst place to be.
Basically she is saying if you listen to every user request your product will become a jack of all trades, master of none.