The last time I posted a job ad, 100 seemingly qualified candidates responded within 2 days. I interviewed 7 of them, and 6 out of those 7 were more than qualified for the position. Having lived both sides of this, I feel hiring is very much a numbers game.
That advice only works if employees get to pick and choose. If for whatever reason you can't do that, focusing on particular companies besides the basics is pointless.
But why?
Maybe reducing number of companies you apply to lets you focus much more on getting prepared and this leads to you standing out from other candidates?
Remember, you don't need a thousand jobs, you just need one. One that suits you.
If I am interviewer and I see a candidate that looks like he/she is prepared, did their research and genuinely care and want to work for the company I work for, don't you think this is huge advantage when comparing to other candidates, all else being equal?
And it is rare that all else is being equal. People who are genuinely prepared typically tend to do a lot of other things right.