I once said a very long time ago that this debate could be a simple equation of talent. I think in a way it still is.
If you were making a resturant you could either invest everything into making one nice big 5 star resturant, or you could buy a shitload of half assed hotdog carts.
either way will make money, probably. What do you want to do tho? sell steaks or hotdogs?
and the talent comes down to whether or not your small set of quality sites can hold and acquire the attention of your dozen of other smaller sites.
now with that said, it also applies to blogs too