Not sure if this has already been said, but the reason why a high volume of applications is important has to do with percentages.
When it comes to innovative ideas, there is no reason why programmers developing for one platform are inherently more innovative/talented than those developing for another. Especially considering that today's app/market model means programmers can instantly/digitally publish their applications directly to a platform.
Assuming that 10% of apps/developers are innovative/well-coded and worth buying, having 500,000 total apps means 50,000 quality apps. Having 50,000 total apps means 5,000 quality apps.
A larger volume of quality apps also means more quality apps per category. More quality games, more quality RSS readers, more quality financial apps, etc.
It also means a higher probability of a "must-have" app presenting itself. Angry Birds is one example of a game that sold phones, but we also have apps like Siri...overlooked/underrated, but now considered a game-changer.