Part of the problem was that "Elite: Frontier" didn't really recapture the magic of the original. The "more-realistic" space combat was just less fun.
However, the other thing that bothers me is that Braben doesn't seem to realize he's competing with a whole generation of people who played Elite, loved it, and already decided to go write some big open-world space opera. Like, say, EVE Online. Or Notch's new project. Or X3? Or Spore, if you want to go the procedurally-generated content route.
There's certainly room to do more in this area. Their ill-formed "gee, wouldn't it be neat" presentation of what he views multiplayer would be like doesn't give me a lot of confidence, though.
ETA: I decided to back both this project and Chris Roberts' Star Citizen despite the very long lead time in both cases.