"By putting this feature into the service, it can potentially prevent me from getting frustrated via the overwhelming inbound amount of reading to do which might cause me to throw up my hands, uninstall it and try something else."
Although I wouldn't say that my primary goal when adding this feature was to keep people from trying another feed reader, Rick is correct that easing frustration will keep customers loyal to your application. Software developers tend to focus on features when talking about their apps, but keeping customers happy requires more than just features - you also have to prove that you'll go the extra mile to tackle the things that frustrate them.
In the case of an RSS reader, one of the most frustrating things for customers (at least, those who have subscribed to more than a handful of feeds) is the feeling of overwhelm they experience when faced with hundreds of unread items. FeedDemon's "panic button" was designed to replace that frustration with a feeling of relief. I often see people Twitter about the panic button and express relief that it offered to help ease their overwhelm.
There are a number of other features like that it in FeedDemon, most of which you'll never run into - but you'll be glad when you do. For example, when you start FeedDemon, it checks whether another instance is already running, and if so, it switches to that instance so you're not confused by multiple copies. That's a common feature these days, but FeedDemon goes the extra mile to detect whether the other instance is frozen, and if it is, it offers to shut it down. Few people will see that feature, but frozen applications aren't uncommon on Windows (I see it with Outlook and Firefox all the time), and non-technical customers often have no idea how to deal with that situation. So FeedDemon deals with it for them.
When I'm using an application that surprises me by going the extra mile to help me, my loyalty to that application increases. I may be tempted by the shiny new features in a competing product, but I'm unlikely to switch because the application I'm already using has earned my trust by proving that it has my best interests in mind. And trust is far more important than mere features.