Matt Gemmell just posted a great article about a concept in app development he calls "Augmented Paper" -sort of the idea of having what's necessary from a functional standpoint, but being "more natural citizens of the real world". He also gets at the idea of not making design decisions for the sake of design, or function decisions for the sake of function. People aren't that absolute and their apps shouldn't be either.
I really like this whole article, but especially this part towards the end-
Apps are only incidentally software; software is an implementation detail. Instead, apps are experiences.
Design an experience. Make it as beautiful - and as emotionally resonant - as it can possibly be. Then adorn the core experience and content with only as much functionality as is absolutely necessary. Functionality - and software-based thinking in general - is like seasoning. A little is an enhancement; any more destroys the flavour, subsumes the artistry of the chef, and may well be bad for you.
Matt says in the article that it is tricky to pin down what makes an app truly great in the way that he calls "Augmented Paper", but I think the above paragraph does just that.