From a marketing perspective it gives potential buyers a "reason" to pull out their credit card. As I understand it, Slate's ad-supported offering will continue to exist as-is, with pagination and a "view as single page" options. Logging in just makes single page viewing default.
The article gets at the tension publishers face. Rely exclusively on CPM ads and you get clickbait, but there doesn't seem to be winning approach on the paywall front. This seems like a really good way to test the process.
In a funny way, it's a great test of the value of UI. Is single page viewing by default worth $5 a month?