All else being the same bigger photoreceptors are better than smaller photoreceptors, particularly in decreased noise and increased dynamic range. So he's infering that if the manufacturers are cramming more photoreceptors into the same sized sensor they must be smaller, therefore less quality.
But it's not this simple, because all else is rarely the same. The technology advances between a 4 year old 8mp DSLR and a recently introduced 10 or 12mp DSLR may have influence. Some of the improvements camera makers have made with smaller photoreceptors include reflective areas and micro lenses to make them more efficient at light gathering. Also it's hard to discount software changes. Software power is increasing as fast or faster than hardware power.
I've been using a Canon 20D (8mp APS-C) for several years, and recently purchased a 40D (10mp APS-C). I was worried that the 40D might actually be noisier at high ISOs. After shooting with the 40D for a couple of months it appears to me that it has slightly less noise at high ISO than my 20D, although the difference is very slight. It might be Digic II vs Digic III?
Overall I'd say it's probably pretty tough even for experienced photogs to see the difference between 8mp, 10mp, or 12mp in 16"x24" or smaller prints. I think the concept that all megapixels are not created equal is becoming common knowledge. People understand it's not just about increased megapixel counts, but the quality of the megapixels. I think this is the reason that Nikon didn't feel compelled to go higher than 12mp with the D3 even though that bar had been reached by plenty of consumer level cameras. On the other hand I also doubt pros would put up with excessive noise in the very expensive, 21mp Canon 1Ds Mk III.