I whole-heartedly agree with what you're saying about trusting your instincts, and not watering things down in an attempt to please everyone.
Still; I've found it's not always good to just blindly following your passion and hope that everything will work out fine. I've started (and often finished) a lot of projects (that I felt would have been fantastic), and they've never seen the light of day. It's not fun putting all that effort in and getting nothing back (both in terms of money and creative satisfaction).
I guess there's probably a healthy balance to be struck somewhere; between on the one hand, following your heart, creating the kind of games that you love to make, and on the the other, making them appealing, attractive, and accessable to as wide an audience as possible ........