Shirky: Situated Software: "We've been killing conversations about software with 'That won't scale' for so long we've forgotten that scaling problems aren't inherently fatal. The N-squared problem is only a problem if N is large, and in social situations, N is usually not large. A reading group works better with 5 members than 15; a seminar works better with 15 than 25, much less 50, and so on.
This in turn gives software form-fit to a particular group a number of desirable characteristics -- it's cheaper and faster to build, has fewer issues of scalability, and likelier uptake by its target users. It also has several obvious downsides, including less likelihood of use outside its original environment, greater brittleness if it is later called on to handle larger groups, and a potentially shorter lifespan.