Dave: I stand corrected. :) Actually, the more I think about it, the more it makes sense. I personally wouldn't care that much about the fuel savings of a Jetboil, but the convenience of it all is appealing. One of the things I don't like about my Pocket Rocket is having to fuss with a homemade windscreen. A Jetboil is definitely more convenient. Similarly, for alcohol stoves, this is one of the things I like about the Thermojet and Caldera Cone.
Kristin: Very good point.
I have thought about innovation and where it comes from quite a bit. I work in an industry (software) that is extremely innovative. Every day someone makes something that is just a bit different, or radically different than what came before. A big part of that is because of the cheap cost of the equipment. If I want to open up my own muffin shop, I have to spend thousands of dollars on equipment, not to mention rent. On the other hand, if I want to write software, I can do it "in my garage" or better yet, in my living room (my garage is cold). The funny thing is, while many software companies started this way, and have a "started in the garage" story, much of that is a myth. People like these stories, even though the truth is quite different. Google is a great example of this. The incorporation papers for Google were signed in a garage, but that was just for show. The hard work had already been done in the comfortable classrooms at Stanford, funded in large part by federal grants.
Google also serves as a great example of how innovation often comes from big companies. Although there have been lots of new ideas coming from independent folks, a big chunk of the innovation comes from universities and big companies. There are similarities of both factors in the outdoor world. You really can't expect someone to develop a new fabric in their garage (although stranger things have happened). It is far more likely to come from a big company that can afford to hire lots of researchers and buy lots of equipment (or from a university). The NeoAir is a good example of this. It is quite likely that other people had this idea, but didn't have the money or equipment to pursue it. An example similar to Google is Black Diamond. They are constantly coming out with new products, because they have the money to throw at it.
Nonetheless, there is still plenty of innovation in the cottage industry. I don't think it is any surprise that it happens a lot with tents, backpacks and stoves. These are all items that are fairly cheap to make and tinker with. If anything, it is surprising how well many items (like poles from Gossamer Gear) stack up against items from bigger companies.
In general, cottage gear makers in most industries are not known for innovation, but for quality. For example, Bose may make very innovative speakers, but few audiophiles would say they are top notch. To get top notch, you have to spend a lot of money to someone who hand crafts each speaker. I think the same is true with lots of high end outdoor gear. If you get a pack from McCale, it probably won't be especially innovative. However, it will be outstanding, which is why he is still in business, and widely respected, after all of these years.
What is most surprising, perhaps, is that the cottage gear makers provide great value, as well as quality. I can buy stuff (and have bought stuff) from MLD, but I would be the first to say that it isn't necessarily a great value (I could get by with lesser quality, but substantially cheaper stuff). On the other hand, tents from TarpTent and Six Moons Designs (to name a couple) stack up well against anyone's tents based on price and quality. There are trade-offs with every bit of gear, but those cottage gear makers provide, in my opinion, the best value in the tent world.