You have a limited number of resources that can work on any endeavor. Call it headcount. People who are excellent at creating user experiences, working with design, and polishing pixels are almost never excellent at building easy to use, scalable, and flexible APIs. And of course the reverse is even more true: plumbers can’t paint worth beans. If you choose to be both an app and a platform you will have half the great plumbers and half the great painters you’d have otherwise.
Charlie Kindel, in his post “Be Either an App or a Platform, Not Both”, points out the difficulties of trying to be both an application and a platform, much of which comes down to the difficulties of designing a platform, period.
My latest post on the Iasa Blog discusses why, even with the obstacles, you may need to be both.
Update 4/12/2013: Mirrored here.