This was just addressed today by Josh Coates of Mozy.com who talked to a small class of CS students. He said, "if your idea is good then there are six other guys out there working on it full time. If it's not good then don't work on it."
On the other side I just finished the Chapter in Founders at Work on 37 Signals. David Heinemeier Hansson created BaseCamp and he only spent 10 hours a week on it. He was the only programmer working on it too. Designers did help out but they only gave a third of their time too. But he said this lack of time was the greatest gift to the development of Basecamp. It helped focus his view on what they needed, and it forced them to make tough decisions about making less software all the time. When you have a lot of time you just get tempted to try to do it all, or at least do too much. So maybe if you don't try to do everything and just the essential then it might be a gift too.
37 Signals embraced the constraints that were forced upon them.
So the short answer to your question is . . . it depends. But it's still a question that needs to be asked.