I make money with iphone + developer tools + web tool + code repackaging. I can follow the $1 principle using those and it works.
Of course, I started with $1 goal, but they are all making far more than that.
SEO stuff is just too competitive, I am not smart enough to go battle against people with years of experience. My next moves are going to be facebook, smaller social network apps. Then I'll face video and add-on tools for iphone.
Assuming niche sites is about SEO is thinking small. I specifically mentioned examples and said to build software around it, not to go make a landing page style stuff.
The journey towards 400 projects will give you the insight you need to make a lot of money. It's the journey that makes the difference, not the goal.