The argument is an interesting one, but advanced in a flawed way. Right off the bat he argues that the lock is "unusable", and does not do so in a very persuasive way. In the consumer smart lock space, August does not seem to be lagging compared to its competitors. (It is available at Home Depot and other hardware stores, and the note by Matt Burns is not cited.) He then argues that the acquisition was primarily for the Wal-Mart deal, which is also questionable- so is the idea that Assa Abloy will switch the contract to use Yale locks, instead? He then jumps to the easy generalized targets against the current irrational exuberance of SV, without naming any other specific cases, except for Fitbit. A more persuasive essay would have tried to quantify the phenomenon, maybe it's specific to IoT, or consumer hardware, but the author only names two companies and dismisses them both.
Overall the angle that an acquisition is the sign of failure is an interesting one during this time of great froth, but this essay doesn't do enough to express it.