If the startup's original market assumptions haven't changed and it can stay in business then I'd say it's ok. Unfortunately startups often don't notice what's happening to their expected market until it's too late.

If after 2 years your site does grow just a little, but stays around 1,000 daily users, would you call it quits?

What were you expecting 2 years ago? Are your expected users still out there for you or did they all go to Facebook in the meantime?