Your assumption that these people would be free to do other more productive works is counter-intuitive, as you are assuming that people who fight Wars want to do something else.
My original observation still stands, that the blog context appears to disregard the positive influence that war has on economy as well as the negative.
If you wish to debate this, then you'll need to prove that in aggregate, war is economically productive. That's a difficult argument to make, and likely to be empirically false.
For a more robust explanation, check out the "parable of the broken window": http://en.wikipedia.org/wiki/Parable_of_the_broken_window
It is never truth that the war is economically productive. But the destruction of capital that comes as a side effect of war keeps inflation on check (monetary inflation defined as money growing faster than the tangible economic output; not price inflation, which is one result of the former).
Besides that, while it might be a net negative economic event, War puts lots of public money in some chosen private pockets. So there are always people lobbying to get into conflict in a perfectly rational way.
However, from where I stand the cold war spurned on the space race, millions was spent by either side on the space race. Technology and the economy surrounding it grew as a result. Perhaps that is not true?