Don't forget that companies like US Web / CKS, Razorfish, and Organic grew quite large during the dot-com boom, when there was plenty of Web dev and design work

Don't forget that companies like US Web / CKS, Razorfish, and Organic grew quite large during the dot-com boom, when there was plenty of Web dev and design work to go around. (Sure, these companies had major downfalls, but I'd argue that that wasn't due to a failure to scale up, but rather management problems and a sudden dearth of clients due to the bust.) Likewise, if you consider that outsourcing firms like Infosys and Satyam are likely doing some Web development work in addition to more traditional "IT" work, those firms have scaled quite well. Infosys has over a billion dollars in revenue each year. Maybe the moral is that shops that only focus on Web applications will have a harder time finding new and larger clients than firms that can provide services that go deeper than the Web interface -- into CRM, ERP, and so on. If you don't like to do that sort of work, then you stay small and run a boutique shop.