I can see the validity of this arguement, but I would tend to disagree. I am not a developer, but I must say that I am very happy with the utilities and general content of linux programs. I believe that slow, controlled developement has helped linux remain stable and relatively bug free.
While it is true that there are a lot of folks out there developing applications for linux, It seems as though the major commercial software companies suffer from a lack of the checks and balances that the open source movement has. They can dump a lot of manpower and money into developing apps that suffer from bugs and security holes, all the while meeting thier OWN agendas.
In short, I believe the open nature of linux development has caused this slow forward momentum.... but it is not bad thing. Let them complain, what we will end up with in the long run will be worth the wait.