While this can be true, it is often the case that the product with more X is not selling because it is poorly executed, or has made too many compromises to deliver more X. In those cases, a product that delivers more X without the drawbacks has a great chance of succeeding.
Right! As the article points out very clearly, it's not the "more X" that stops people buying the new product. It's that to get more X, those cars gave up Y and Z which were really the most important parts even if customer's didn't convey that to the product research guys.
In this case, if the customers do say that more X is a good thing, then having more X probably would lead to more sales for B -- but B is probably deficient in Y and Z. You have to cover the required essentials for the specific product before you can improve on the nice extras.
In the case of a small car, customers would say they'd like it if it was bigger with more headroom and more carry space. If you solve this by increasing the actual physical size of the body, your product will fail. If you solve this by laying out the existing body to give more room, your product will succeed. Although even if you succeed in keeping the same amount of weight and body size and improving headroom, your car will still fail if it now looks ugly because of the changes.
The key is to consider the entire product holistically and focus on all of the user's needs at the same time. Don't just focus on 'more or less X'.
You mean selling a chassis with a a single seat, huge motor, stick shift, and the rest of the "car" being made up of a ginormous sound system wouldn't work? o.O
