True to an extent - although bear in mind he’s not saying those were shit games, they were still very good - but I think in terms of CRPGs (where the watchword is choice and consequence) he’s saying that they were dumber than the just-previous generation of CRPGs (Krondor, etc.), which weren’t so limited by having to display everything graphically, and had more room to:-
a) make skill options meaningful and interactive, as opposed to Potemkin skill shows, like most of the multitude of skills and abilities in Fallout, Arcanum, BG, etc. IOW, they were closer to tabletop or text games, where you could actually do wild, whacky and intricate things, because the game world for tabletop or text isn’t limited by having to be represented. (And actually to some extent, the “book” sections in recent games like Pillars and Pathfinder:Kingmaker are a good way of getting round that limitation, so some developers have obviously been aware of it!)
b) have richer and more interesting stories, where the world reacted to your choices in a way that made sense, rather than relying on what NC calls “graphomania” (reams of text that’s ultimately just fluff).
Personaly, I still think the idea that the original developer of the Bethesda open world RPGs (forget his name) had was the right one. Ideally, you want something like an AI DM who shuffles the furniture of an open world around you behind the scenes, in a way that reacts to your choices.
Either that or the option Neverwinter Nights opened up, which was to have someone be an actual DM in the videogame and shuffle the world around, inhabit NPCs to talk to you, etc., in the same way that a DM would in the tabletop setting. (I still remember fondly to this day playing a few sessions in a NWN creator world - it’s a whole other level of eerie and wonderful, when NPCs come alive and talk to you like real people and direct you in your adventure!) That definitely works, and should be explored more, I think - although there’s the obvious problem of malicious 12 year olds there :)
I guess Bethesda’s attempt was just too early, but eventually, I suppose, when we have “real” AI that’s smart enough to act roughly as a human DM would, that will be the ideal (in terms of a self-contained videogame, or by that time probably some kind of genuine, wired-in, all-enveloping 3-d virtual world).