Is this just a project? Or, is it a start-up?
If it's just a project, then it's probably just a hobby and you can make the decision based on how much you enjoy your hobby.
If it's meant to be a start-up, then I think you need to focus on producing some hard data on market size and potential revenue before you even start thinking about the possibility that the space is too crowded. Whether or not the market is too crowded depends not so much on what features you can offer over your competitors' products, but on how much money you could potentially. Can you compete in this market and cover your development and infrastructure costs? Beyond that, do you think that you can eventually make enough profit that the opportunity cost of pursuing this specific start-up is worth it?
Regarding revenue:
What is your business model? Do you charge people for your application? Do you count on advertising income? Is the application designed in a way that generates revenue through virtual currency purchases or pay-per-action? Have these revenues been growing in line with your user base?
Regarding market size:
How many Facebook users do you think will eventually use this type of application? How many of them do you think will use your application? What percentage of invites to your application are accepted (are conversions)? When you graph your new users and your conversion rate, are they growing exponentially (like any tech start-up should be initially)? Or, it is only growing at a slow increment, nearly flat, or declining? They graphs would help you determine your overall growth and what percentage of total Facebook users you may be able to convert. That would help you answer the most important questions (those regarding financials).
If either the growth of your income or your user base are not growing exponentially, I would suggest that you think about possible ways to increase both to that level of growth and factor the amount of work required into your decision.
If you're not able to make both your user base and your income grow exponentially, I'd suggest you seriously consider pursuing a different start-up idea. You may be able to achieve the creation of a lifestyle business (one that would pay you a reasonable salary - $150K USD/yr) with just fast, but non-exponential growth at this early stage. But, that would not be the kind of life changing start-up that I, and many others on HN, are after.