This is quite similar to: SE Proposals: Breadth Versus Depth
But I hope, different enough to be worthy of discussion.
A good Stack Exchange site is one with a well-defined subject around which a strong community of question askers and answers is formed. That's pretty much a recipe for success. Sites with too broad or too narrow a content definition tend to wallow and die because it's hard to get a real community involvement - while a great topic that can't get a community may never even make it to beta. So... for a thriving site you need both.
But I'm trying to figure as to whether there's any good heuristics in terms of whether content or subject matter should be king. Here's two examples that I've been pondering:
Specific Historic Reenactment Group (i.e. the SCA) vs. Reenactment in general - all reenactment groups have some common ground but some of the really valuable, nitty gritty answers can be group specific - for example, reenactors of all types may be looking for guidance on methods of dating textile artifacts. But only members of the Minutemen will care what the bar is for attending a Minuteman event. It would be shame to loose that sort of content just because the site is broad, but the vagaries of ratings like "too localized" might do just that. Also, members of the SCA already have a strong online presence, but (IMO) communication of a meaningful Q&A format has flatlined in recent years, as the online community has grown too big for an old school email list format. There's a number of communication problems that would be solved by a StackExchange site, but can it solve all problems if the topic is too broad and SCA-relevant questions get lost in the welter of questions? And/or if one major community populates the site, will there be pushback or issues when other communities get on board?
Art forms that Cross Topical areas - case in point, Burlesque - modern Burlesque performers mix theater, dance, and heavy use of costuming & prop construction to build their acts. They also care about promotion and other peforming arts business skills that most other performing arts professionals would care about. The thing is - there's a strong an thriving Burlesque community out there (smeared currently across Facebook, Livejournal and a few email lists). Members of the community (to some extent) want to ask questions to other members of the community - I suspect they'd much rather join one "Burlesque" StackExchange than join a dance exchange, theater exchange and craft exchange. Sometimes that's just a community focus, but sometimes that's because if a Burlesque performer asks a seamstress how to make a dress, the answer is not likely to account for the specific needs of the Burlesque performer - so although "how do I make a dress?" would be appropriate to a generalized clothing making site - the question is really "how to I make a dress [for my Burlesque performance]" which includes a whole lot more info relevant specifically to the application.
I throw those out as two cases in point, but I suspect there's more out there. Communities form for a lot of reasons, and sometimes it's not easy to break it up by subject matter alone. After listening to some of the new SE Podcasts, I realize this a topic that Jeff and Joel have been thinking about long and hard, and I'm really interested to hear the current thoughts on this...