It's always hard to find a market for your product. This is one way to make sure there is a market before building a product.
http://www.kk.org/thetechnium/archives/2008/03/1000_true_fan...
If you think about how Twitter needs to reach 100 of millions if not billions of users to possibly become sustainable, or figure out how to squeeze more money out of the users they have. Then compare that to the App.net proposal. Especially the part about making the user the customer. Then you can see how having a small set of faithful users might be more sustainable.
Dalton wrote more about this in his post: http://daltoncaldwell.com/an-audacious-proposal
disclaimer: I work for App.net, but this post represents my own views.