I agree with you. But in a way, isn't that the 37Signals story? Basecamp was a byproduct of their consulting job -- something they just made for dogfooding. They realized they could make money and then released it as a business.
Along with the "build a business" mantra, they also build apps, but they are pretty quick at converting them into businesses when they see the opportunity. When they don't see a business opportunity, they do other things (like releasing Ruby on Rails)
It's exactly what 37signals did. They scratched their own itch by building an app that they wanted to use. It then happened to make a ton of money and eclipsed their consulting revenues. They didn't start off to make all this money, but it was a byproduct of the passion they put into building the app. Many great software success stories are similar to theirs.
For every 37signals there are at least just as many examples of companies that set out to build a business...and built it. I can see why scratching your own itch may be the better way in certain situations. But I can just as easily see going all out to build a business of apps.
Is there even a way to gauge which one is "better" other than personal preference?
Along with the "build a business" mantra, they also build apps, but they are pretty quick at converting them into businesses when they see the opportunity. When they don't see a business opportunity, they do other things (like releasing Ruby on Rails)