It means that the process of rolling stats for an NPC is the same as rolling stats for a PC, just like it says in the DMG. There's nothing stopping you from having an NPC with 7 Intelligence, the same way that there's nothing stopping you from having a PC with 7 Intelligence.
If only NPCs were capable of having an Intelligence of 7, and PCs never could, then your setting is trash (to borrow your term) because it's built on meta-gaming. There's no such thing as a believable world that fundamentally operates on the fact that it's just fictional world (aside from silly gimmick settings, that no serious gamer would ever want to play in).
The amount of effort required is variable between games, and the upside is that the world is internally consistent rather than being contrived.
To make a comparison with stories, it's the difference between one that's well-written (and potentially immersive), versus one that's full of plot holes.