The article specifically says that there is statistical evidence showing that Ryanair does, in fact, preferentially allocate base-fare paying users to middle seats. Though the article does not explicitly say that the evidence supports a particular variant of the algorithm, your particular alternative does not seem to alter the underlying reasoning here, which is that if you check in late enough, all the middle seats have been allocated. Once that happens, you are not going to be allocated a middle seat, regardless of how the airline allocates the remainder. (This could, however, change your odds of getting a middle seat earlier in the process, and whether a later check-in leaves you more prone to being bumped (which I assume Ryanair does unless it is forbidden by law) is another issue to consider.)
Update: I see that Ryanair does not overbook, which puts some perspective on the complaints about it - I don't care about meals but I do about the risk of being bumped.
Update 2: I overlooked one part of the alternative algorithm, but I think that it actually makes it less likely: if they are holding back middle seats on the chance of upselling to later arrivals, where are they going to put those people? It seems that they are likely to end up with a bunch of middle seats with no chance of upselling even to passengers who would have done so, or possibly having (even more) disgruntled passengers who paid to choose but got a middle seat anyway, depending on exactly how this scheme works.