That's hardly the case. In Jeff's words, I dare you, double dog dare you to count the number of Linux distributions. Each version satisfies a different customer target, same as each version of Basecamp satisfies a different type of company.
The point is that features in a Linux distribution are not cut out because of "consumer surplus". They are customized to make certain tasks easier for some people ... but the various distributions don't have artificial limitations.
Say you are tired of KDE in Kubuntu, you just "apt-get install gnome-desktop". You are tired of Apache, then "apt-get install lighttpd". Defaults are not limitations.
And seriously, most people pick one distribution and stick with it. I'm using Debian for everything ... work servers, laptop, home station. OK, to be honest the home station has Ubuntu on it, but that's still 95% Debian.
And, if there's a feature missing (like hardware limitations), you are most likely to fix it with a kernel upgrade, or with a patch someone on the mailing list gives you for free.
I strongly agree... I think the OP of this threads' contention is not in the same spirit as Mr. Atwood's. I think this Coding Horror post was lamenting the existence / necessity of the "pricing tiers" common in commercial software.
Linux distributions, and even versions of Ubuntu itself, are not organized in a "tier" layout, where Tier N has X more features than Tier N - 1, or Tier N's features have X more capacity.
Linux distros and Ubuntu versions, on the other hand, are organized horizontally: They don't have better features (per se), but different features.
1) Not all those are official editions.
2) None have features deliberately turned off.
3) Most , if not all, differ only in what optional components are installed by default, If you change your mind you can simply add whatever your missing - you can install Ubuntu, then add the bits that make it Kubuntu, then add Xubuntu etc.
Well, I think the point of the article was not that segmenting made the product more expensive, but rather, you now have to sit down and spend some time carefully deciding which version you need.