You hit the million dollar question.
The problem is that the "subscriber count" metric is bullshit.
First I will explain what that count is. Then I explain what we think people want from the subscriber count and how we are working to address that need.
The subscribe count is based on the feed reading tool and the IP address (if it is a desktop client like NetNewsWire or FeedDemon). FeedBurner has explained a fair amount about this number and this post provides some good background (http://blogs.feedburner.com/feedburner/archives/2006/09/a_pe...).
The problem is that "subscriber" is supposed to equate to "person", but it does not. In email marketing this works because we have a person identifier (the email address). There is no similar identifier for feed. What that means is that out of TechCrunch's 100,000 subscribers, I as an individual represent 5+ subscribers (once on Google Reader, once on bloglines, once on NewsGator, once with NetNewsWire at home, once at NetNewsWire at work). I am a pretty typical TechCrunch subscriber so it is possible the number of "people" is actually 20% of the number of "subscribers".
The converse is that many corporations and Universities have only 1 outgoing IP address. So all FeedDemon subscribers at Belmont University here in Nashville show up as 1 subscriber.
Why this is important is because of what people want the "subscriber count" to be. They want it to be an apples to apples comparison to compare popularity across blogs. It is just too inaccurate to be that measure.
We initially had this count and as we looked at the data we felt that it was inaccurate at best and sometimes completely misleading. This was the driving force in our decision to remove this feature. It is a risk, but I think it represents an intellectual honesty that our customers will appreciate.
The other reason people like the "subscriber count" metric is to measure growth and decline in their individual blog. This is why having the number fluctuate so wildly in FeedBurner is so frustrating.
We have not solved the apples to apples comparison yet, but we have some promising progress.
As for measuring growth, once you break that out as a goal it is easy to see that there are other ways to answer this question.
As you said "The fact that FeedBurner has such a struggle with accurate counts hurts their credibility". Hopefully our willingness to find a better way, even if it may be perceived as a shortcoming in the short term, will help our credibility.
What do you think about our strategy here? (I really appreciate the feedback we are getting from HN. This is such a valuable resource!)