A potential customer who is a non-idiot will be able to work around idiotic business practices, while a potential customer who is an idiot won't be able to work around good business practices.

Hence, you grab more customers by catering to idiots. Unless you as a business want to avoid these clients.

Disagree.

Idiot design means more steps for non idiots (see: terminal vs GUI)

And how many consumers purchase terminal apps vs GUI apps?