Why is it a mistake to apply for wide patent protection?

It isn't necessarily a mistake to "widely" apply for patent protection. Where a startup is sufficiently capitalized and has a strategy to aggressively practice the technology in numerous jurisdiction, it may even be acting responsibly to apply for protection internationally. The applications themselves should be broadly drafted keeping in mind that the scope of claimed protection will be narrowed during prosecution. What would objectively be a mistake, as Mr. Weinreib identifies, for you presumably as a practicing entity would be to pursue patent protection (i.e., incur the substantial expense) for technology you would not be practicing, licensing, or litigating-over, or to initiate a broad patent protection campaign without first qualifying your technology's patentability. Your quote "seeking a wide variety of patent protection that later turns out to be unrelated to where the company actually ends up heading" implies a certain absence of foresight on the part of the entrepreneurs (e.g., Are we baking cookies, or are we developing a space elevator? Let's file applications for both!) which in practice should not occur too frequently. It would be prudent to speak with local IP counsel to identify the scope of technology you have, or are developing, and propose an IP strategy that corresponds to your venture's financial predicament and strategic goals.

Your IP strategy should basically be to protect what you are going to commercialize - therefore, your patents should be oriented toward what you have obviously developed and seek to commercialize. If you have the luxury, meaning funds and/or resources, you can then seek "defensive" patents, meaning, obtain patents which you would not necessarily commercialize but which would prevent others from making, using, or selling - or, in other words, commercializing. Remember - patents do not provide YOU, as the patent owner, the right to make, use, or sell what is patented - patents prevent OTHERS from making, using, and selling what you have patented. From a broad or macro viewpoint, things usually have a way of working out where you usually obtain patent coverage which you deserve, meaning, patents which are not really overly broad because other patents usually exist and your patents are either distinguishable from such prior patents or are improvements upon prior patents. Lastly, there may be an instance where you obtained a patent for product A, which happens to potentially infringe a patent owned by Company B, but Company B wants to produce what you have patented in connection with product A, so you can cross-license each other whereby you can both produce the product without exposing yourselves to infringement by the other party.