Because when a competitor comes along that does have venture funding, they will leave you in the dust. They will be able t do more in less time and scale faster, while your hobby site remains just that.
With regard to your point on calling it a 'hobby' though. Because its possible for someone to put in 30-35 hours a week (over and above one's full-time commitment at the day job) if they're willing to work hard during 'free time', could this not serve as reasonable mitigating circumstances?
I've found that nearly all my completed projects have required the ability to say "Fuck it" to all my other commitments and just concentrate on them. My first project for FictionAlley was done during summer vacation. The big rewrite of FictionAlley lingered for 3 years while I kept putting it off for college coursework, and only got finished because I put in a 4-month gap between graduating and getting a job. Scrutiny was done instead of studying for my physics final exam, which I ended up flunking anyways. My most successful project at work involved blowing off all my boss's requests for busywork, which made him pretty mad at me until he saw the result. Once I had to start paying attention to his busywork again, my productivity dropped way off.