I think it's an important topic that is also more nuanced than most people realize. I'm knee-deep in real life at the moment, so I'm going to have to post what I've researched in bits and pieces. Sorry.
First, read Barry Schwartz's The Paradox of Choice. If you're not a reader, here's a youtube video of a lecture discussing the book. There's also a TEDtalk but the lecture I posted is more recent. The most relevant parts are between @15-25 minutes if you don't have time to watch the whole thing.
IMO, the relevance of limiting your choices wrt to ERE ...
1. Limiting daily choices reduces decision fatigue; save the decision making for important decisions. Wrt ERE, I see it like the big three in costs ... making the correct decisions wrt housing, etc, has much more of an effect on your life than what you eat for dinner every day. Put your decision energy into the big decisions. All decisions are not equal.
2. Limiting choices helps you to actually make the decision, and helps you to move on to the next decision. I think part of what people find paralyzing about ERE is that there are too many choices. As soon as you narrow the field and make a decision or two, the subsequent decisions get easier.
3. It lends itself to minimalism, the benefits of which have been documented in other threads.
4. Limiting choices has been shown to make you more satisfied with your choices. We don't seem very good at that here, so this might be one way to find more satisfaction.
5. Limiting your choices also limits the amount of planning required. Some of you make yourselves crazy planning for contingencies. Others seem overwhelmed when trying to plan for post-ERE life. There's a difference between looking for faults in your planning and looking for all possible failure points in any possible future. Spend time running those scenarios occasionally -- like the hurricane prediction models they call spaghetti models -- but focus on the cone, if that makes sense.
WRT #2 above, I think people [here] sometimes feel embarrassed by their big life choices because those choices limit their ERE prospects (by that I mean choice of partner, location, occupation, etc). Don't confuse life choices with financial choices. Yes, there is some overlap. OTOH, money is only one part of the equation -- those other choices narrow the field but don't necessarily preclude ERE. For most people, I'd argue that those initial choices might help people pursue ERE because they narrow one's choices enough to wrap their head around ERE. They are then also more likely to experience satisfaction, not sacrifice, after making those choices.*
Limiting your choices doesn't mean ignoring your desires. If you know you want X, then find the best X ... that's not the same as looking at the entire alphabet first and deciding you want X, then beginning the process of finding the best X. Following your desires and/or examining your motivation for them is not the same as decision-making.
I think the way we tend to frame ERE -- as a kind of freedom that gives us infinite choices in what we can do -- is paralyzing and sets us up for disappointment. I prefer to think of it as the freedom to make a decision now *and* the ability to change my mind and make another decision later if desires or circumstances change. It's important to limit choices when making decisions, but ERE gives you peace of mind because you know you have the resources to make a different choice if it doesn't work out. **
I guess my main point is that by limiting choices, you'll save your decision energy for the consequential ones and ultimately end up more satisfied no matter what you decide. I'll post more references when I get the chance.
* I've rewritten this paragraph a number of times and still can't get it quite right. Hopefully, it's clear enough. Sorry.
** I think it's hard for people to understand ERE when they see life as linear (biological life is linear, experiential life is not). They would also then see decisions as permanent instead of seeing the 'web' and how those decisions are all just parts of a functioning system, the best of which allows for changing out the parts as desired without bringing the whole thing crashing down.