I know that you enfatically said "I disagree." (twice), but I'm not sure that you really do.
"Someone out there with a better idea will raise a bunch of money, give it away for free, build scale and charge less to reach the audience."
"The only way a new product will ever dislodge a entrenched rival is when they offer something unique and compelling or are readily interchangeble with the old one."
Sounds like the market forces that he describes are part of this "new economy" where huge amounts of venture capital can be raised and thrown away trying to create the "next big thing". The next big thing in almost all cases improves on what has came before, just as you said "something unique and compelling".
Overall, I think the article is a good one, and his point is pretty accurate. I don't think it's revolutionary, but there are some ideas in there that I have never thought about in quite the way that he is going into.