Actually, in this instance I was referring to bloat as having a cluttered interface showcasing features that a user would never want to use. Look at some of the instant messenger programs out there. There's chat, Direct Chat (kinda silly, really), group chat, games, voice chat, webcam chat, whiteboard, nudging, file transfers, even incredibly ridiculous stuff like per-user join/part sound effects (a "feature" in the new Live Messenger, if I recall), all while you have to deal with things like advertising that's lodged into the interface as well.
The point isn't necessarily that this slows the computer down (although a case can definitely be made for that. More bloat does mean slower performance), but that most of this isn't really needed for someone who just wants to bring up a chat window with a single person from time to time and send a simple message asking about last night's homework or whatever. For some people, monolithic programs might be useful, but for others, a Keep It Simple Solution would be far preferable (and then there are projects like KDE, an environment which seeks to strike a balance in between the two extremes).