Simplicity or Easier to use?

Found an interesting entry on the 37signals blog about simplicity.

"Imagine a world in which software companies simplified their programs every year by shipping with 10% fewer features at 10% higher cost due to the expense of simplification. For the consumer to get less and pay more seems to contradict sound economic principles…Yet in spite of the logic of demand, “simplicity sells.”

It's an interesting point, but I would go for a strategy to make the product 10% easier to use for every year. Not necessarily taking away functionality.