One thing I think that is missing here is that there is a category of app developers which are implementing NEW technologies (Machine vision, AR etc...) which need tons of funding but doesn't necessarily lead to further projects in the way that a true small business does. If people took the poster's approach, then those will never get funded and that technology will either languish or come from bloatware companies. It is hard to get those up and running because it is so leading edge and is not repackaging a social/mobile/local/aggregation etc... service.

The whole VC world is looking for the billion dollar exit, which is entirely unsustainable and given it's history doesn't produce the requisite amount of major tech breakthroughs.