I have HUGE respect for you and what you've accomplished; your posts on HN detailing your experiences as a micro-ISV are some of my favorites.
That said, I think you're making the same mistake that 37signals does, which is assuming that your isolated experience is representative of the population as a whole. Your business has some unique aspects that do not necessarily apply to every business type, particularly the high margins. Competition isn't necessarily the death-knell of your business, but what if your market became very crowded with companies who charged less, offered better customer service, marketed more effectively, etc. How long would you be able to survive? Now imagine that you have a bunch of salaries and overhead and everything else that a growing business usually needs. Not saying that you can't win, but it's not like the market for bingo card creation software is so big that it can support thousands of companies :)
That said, I think you're making the same mistake that 37signals does, which is assuming that your isolated experience is representative of the population as a whole. Your business has some unique aspects that do not necessarily apply to every business type, particularly the high margins. Competition isn't necessarily the death-knell of your business, but what if your market became very crowded with companies who charged less, offered better customer service, marketed more effectively, etc. How long would you be able to survive? Now imagine that you have a bunch of salaries and overhead and everything else that a growing business usually needs. Not saying that you can't win, but it's not like the market for bingo card creation software is so big that it can support thousands of companies :)