Putting the minimum effort in and building effectively mediocre features is not how you build customer loyalty and excitement in the market place. And it makes it very easy for competitors to go after you. Sure you should keep the scope tight but you should try and at least make it highly usable. Even if its just so you can sleep at night knowing you made something great.
Of course, one noteworthy truth is that Panic had/has existing income streams that allow them to take their sweet time pursuing perfection. The majority of startups have a fixed quantity of runway, making MVP the better choice by default.
However, a minimum viable product basically means 'ship something and iterate towards complete.
Considering how many products I have worked on that no one ultimately wanted, you need to prove there is a need for your product BEFORE spending man-years on it.
Even if you understand the problem, putting a simple solution in front of your clients will teach you a lot.
Then two years later, you might be approaching something complete, but with confidence that there really is a market.
We created something that was first released as an MVP (and we made sure that was clear for our customers). Now that we know we have customers, and we know people are willing to pay... we're taking our time to make sure we do the rest of it right. And so far, our customers have been very understanding, patient, and helpful through the process. Something I didn't think would be the case.
*edit: typo