Niches do have some great advantages (less competition, greater focus on a smaller scope, etc), but sticking to one may be where some take the wrong turn, and may even kill creativity.

Take a look at Envato. They have several niche sites, all very successful, but each compliments the others in their own way.

Niches also have the potential to alter your focus by putting the blinders on. Sometimes, you boil something down to something so specific, you may miss out on the sweet spot.

It's all a matter of the frame in which you look at it, which is ultimately the key to several choices in design and life.