http://www.techcrunch.com/2009/03/24/no-never-surrender-to-your-users-facebook/
Making users happy is a suckers game. Pushing the envelope is what makes you a winner.
Love the quote. I wonder if it holds up in edu? I think the key to it working is having killer design. In the linked article he is talking about Porsche owners -- well, porsche has killer design. FB, for all its issues, has evolved into a forward looking application -- one that will be transformative in the design of other spaces (if they don't get scared and go back in time).