I would not worry about it too much, there are people that will buy anything, even rubber chickens. Yes you will get less traffic but then it will not cost you anything or much to get higher up the engines to get those customers. You could probably have 50 niche sites if you worked hard all bringing in a small amount rather than 1 big one that brings in nothing.
The one thing i think you have to work on with niche sites is actually making them really worthwhile for people. Articles, news a community sense of spirit perhaps. I have seen many "niche" sites that were nothing more than links which is not what niche is all about really.
If you spend your whole spare time on one subject each and every one of us in here would be more qualified in that subject than anyone else, combine that with a little commercial common sense and any project can do well.
You have to understand that online use will esculate far more than it is now so your potentiol is increasing all the time and there are millions of people in this one country alone.
I think the biggest thing people get side tracked with is greed rather than the desire to build something people really really want. You can work on monetisation after you know you have the traffic to support and perhaps the lack of serious hard hitting commercial stuff will help build your community as well.
Take this forum as an example, nothing more than a cheap forum script to begin with just sat here. Slowly it is now the number 1 resource for this kind of thing. Remembering how old it is Matt could not of been more niche if he tried at the time.
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