Imagine you have an idea for a new type of hotel. Would you build just two rooms and see if people liked the general idea then, if they did build 15 rooms and if those sold build 40 rooms and then eventually 100? If so, you would end up with a building whose core infrastructure was not designed to make it efficient to service and run a 100 room hotel. That is what can happen with a lean startup. You could argue that once you prove a market then you can always go back and rebuild the thing from scratch when you have more resources, but that too isn’t really true.
It seems to me he is, in part, talking about the idea of "right sizing". But it also seems to me that part of the point of starting lean and using customer development is to develop the founders -- their skills in dealing with the customer, their understanding of the product and market, etc. This piece talks like it is about "the product" but towards the end makes this comment:
Lean startups can be attractive because they minimize your chances of failure. They allow you to string along a mediocre business for years while keeping your day job and justifying the whole thing by saying you are lean.
The above comment brings it back to development of the founder as an entrepreneur. Perhaps the author is struggling to understand what went wrong and doesn't quite know how to frame it -- which would make perfect sense because if he already understood it well enough to frame it well, the odds are good he wouldn't have made the mistakes he is frustrated by. He would have done something else (and made some other set of mistakes/discovered some other set of pitfalls).