I was going to post a quip like, "Yeah, FireFox shows how bad a decision it was to throw out the Netscape code." You made the case much better.
Sometimes you really do need to start over. It may be true that it's done far too often, but sometimes it is the appropriate choice.
Joel often rubs me the wrong way. I've only read ~ half a dozen of his posts, but his I-used-to-work-at-Microsoft-so-I-know-how-to-write-software / apply-for-a-job / whatever-better-than-you attitude grates sometimes.
People who make decisions he looks back on in hind-sight and disagrees with aren't all idiots. Borland and Netscape were done in more by MS's anticompetitive actions than by coding decisions...
My $0.02.
Cheers,
Scott.