BugTracker.NET's Corey Trager posts about "featuritis" - one simple definition is where continually adding features to software eventually pushes users beyond happiness. Corey references Kathy Sierra's original post which explains it a lot better than I can here (and has a nice graph too).
I have two counter-arguments to the simple definition of "featuritis": discoverability, and user personas (to be fair, Kathy goes into a lot more detail and her post is well worth reading).
If an application adds new features but makes them hard to discover, or does the opposite by adding new features and making the older ones harder to...