If you’d like to feel overwhelmed by the sheer number of “Web 2.0″ sites, see this collection. It will be interesting to see which of those sites fail and which succeed. Does the volume of competition and the proliferation of niches imply a bubble? If so, the typically American manic optimism that fuels it is an economic plus, according to Slate columnist Daniel Gross.

And it’s driven by technological innovation:

…the excitement of a new technology interacts with some of the more unstable components of America’s character—boundless optimism, a tendency toward entrepreneurship, a tolerance of creative destruction, and greed—to produce a kind of mania. So, every time a hot new technology comes along (whether it’s the telegraph or the Internet), Americans collectively lose their minds—and then lose their shirts.

Looking back through the last 150 years, a familiar pattern emerges. A wonderful new technology or economic idea arrives. A few good years of solid growth help engender a sense that things are different and that new rules apply. Hype and rosy projections—from Irving Fisher’s 1929 prediction of a “permanently high plateau” to Dow 36,000­—justify investing at stratospheric levels. The trend, previously confined to the business community, crosses over into popular culture. Everyone’s buying stock, investing venture capital, refinancing a mortgage, installing compact fluorescent light bulbs. And then, pop! The bubble bursts, heroes become goats, and bankruptcies spread. As corruption and venality are exposed, self-loathing and recriminations rule the day. (See: subprime lending, spring 2007.) And that’s when all the moralizing narratives about the tragedy of bubbles get written.

But that excitement leaves behind something permanent and useful, according to Gross: infrastructure. And in fact Web 2.0 may be the offspring of the last decline:

The Internet pop has left us with Web 2.0—Facebook and Skype, MySpace and YouTube, and, most of all, Google. Each of these companies either was started or gained critical mass after the Internet bubble burst. Each gained tremendous scale overnight thanks to all the cheap excess capacity built during the 1990s bubble.