Paradox of Navigation

I started reading through Schwartz's Paradox of Choice and already came across an interesting concept that can be applied to information architecture. In the subsection title "But is expanded choice good or bad" he begins to delve into the subject of many choices and does the help out a consumer or hinder him/her. On page 20 in reference to a study about choices, "A large array of options may discourage consumers because it forces an increase in the effort that goes into making a decision."
Applying this to navigation and information architecture, what does this do for designers and customers that still want to give their users as many options off of their navigation. Does the "Amazon" or "Target" show me all categories really work or does this present the users with too many choices? Is it better to let them narrow a subject with simple navigation and then broaden out once they see all their choices in further context? I would vote for the latter. Too many choices can lead to wasted time and false trails or distractions.