Don Norman has an interesting article saying simplicity is not the answer. Quite true, especially because nowadays simplicity is getting dangerously trendy.
I believe the right balance of functionality and simplicity also depends on the user’s profile and needs. I feel frustrated when I have to bear complexity introduced because of features I hardly use.
Having said that, simplicity is not about lesser features. It is about designing the complexity necessary to offer value and better experience to the user so that it is laid out according to the his/her knowledge, or is easy and intuitive to understand.