Kevin Kelly never said getting to the level of true fans necessary to earn a living was easy. He also said that 1,000 and $100 were oversimplifications for the sake of making his point (i.e., what people will spend on your work and how many people you'll need to do that each year to live will vary widely from artist to artist).
The point was he was making, as I read it, was that artists can make a comfortable living in the long tail by attracting and catering to (that's the key part) a group of die-hard fans. It's labor intensive, but it can be done.
A friend of mine is a niche musical artist who makes a living playing small shows, selling t-shirts, and putting out one new album per year. He lives comfortably (though by no means lavishly) and has a lot of fun. His MySpace page says he has 12,000 fans, but his shows usually have 20-50 people, and often, the same people will go to every show they can reasonably drive to, will buy every one of his CDs, and purchase any new t-shirts or stickers (or whatever) that he makes.
In other words, he found his group of true fans, and he caters to them by making music and merchandise he knows they'll want. In return, they buy his shit and he makes a living.