I don't think it's true that it will never work. For one thing, most of the large enterprise accounting packages are web-based, and plenty of people use them (and pay a pretty penny for the privilege).

We've been developing the web-based accounting backend that now powers FaceCash (https://www.facecash.com) since 2001, and we also found it hard (read "impossible") to sell as a startup that no one had heard of. However, once we built it into the payment system, we started to have all kinds of businesses interested in using it. It's more of a marketing problem than anything else.

As for focus, we've deliberately ignored countless VCs who have insisted that we do one thing and one thing only. Accounting software needs to be robust in a wide range of areas for it to be usable. If you can do Accounts Payable but not Accounts Receivable, what you have is a product that no one wants.