Yeah, forcing users to make a decision or navigate a cluttered UI are both ways in which options decrease value. So adding options can suck if people aren't going to exercise them (which is what I see with a lot of options that get added to software -- only a very tiny percentage of users ever tweak them.)
However the claim I was debating was that a second sign-in method would be bad because people would exercise it. The argument was basically that it's bad because it's increasing value for users in a way that decreases value for you. And I don't think adding a second sign-in method to a page that currently only has one button really causes a difficult or confusing decision or creates a cluttered UI.
I suppose I still do see your point, though, since I personally wouldn't go much beyond that -- "sign in with facebook or twitter or google or browserid or github or create an account or or or" sounds like a miserable experience.
