It is true that there are too many blogs but only a small fraction of these blogs is well targeted, constantly maintained and diligently promoted everywhere on the internet. So, read below and prepare yourself for a long haul.
1. Not All Traffic to your blog Is Equal: Search engine traffic gets you people who might see and click on ads; Social media traffic (from Digg etc.) is less likely to halt for a while, look at ads.
2. You can't blog on whatever you think is "cool" and build a large audience. That way you might build an audience of '1".
3. People don't like to comment unless they are spammers or promoting their own blog. Remember the 1 percent rule - more people will lurk in a virtual community than will participate. This term is often used as a euphemism for Participation inequality. (source: Wikipedia)
4. Only a few bloggers are making a six figure income: Steve Pavlina (self improvement), TechCrunch (web 2.0 startups news), Problogger (Blogging advice), Boing Boing (Group blog), Shoemoney (SEO), Aaron Wall (SEO, ebooks, consulting), John Chow (SEO), Engadget (Gadgets), Zac Johnson (affiliate marketing blogger)...it is not a long list.
5. Blogging can bring legal pitfalls, especially if you happen to tred on the toes of an influential and powerful big business. e.g. the Chetan Kunte episode (India), when a blogger was sued by TV channel for having criticizing the channel's new coverage.
6. Blogging is not a replacement of your day job, unless you can live on less than $1500/year. Most of the blogs listed after #50 on Paula Mooney's list of bloggers' and webmaster's salaries are below the $1500 mark.
7. Blogging is a full day job - that is how the top bloggers work, posting multiple times, reading, researching, networking...besides, writing quality posts takes time