[EDIT:] For those who didn't read the article, this is a cute parlor trick, but RC4 is broken and should not be used. If you really want a small cipher, use TEA or one of its more recent variants.
I think the author is pretty clear about that in the first chapter. And it's not because it's "broken" that it's not interesting to study it.
With AESNI, you could probably make a pretty small AES implementation too...