While emotionally, I'm with Monte Cook on magic items, I think he's ignoring the fact that 3E and 4E magic item rules evolved the way they did for a reason. Without addressing those reasons, this seems more like wishful thinking and/or throwing red meat to the D&D grognards.
The truth is that giving a +5 holy avenger to a 5th level character does change the game. Challenges that would be difficult can become a lot easier. Going the other way, where a character has less magic than expected, a difficult challenge might shift to impossible.
If the magical items don't have this effect on challenge, then they are not useful, and are mere trinkets or window-dressing.
As for magic item economy, well, lets say the players want to sell a magic item? Is it sensible for people to not buy the item if it is offered at a price they can afford? Of course not. I would buy it, and so would you. So why does the situation not exist in reverse? Similarly with crafting items. If a player can create an item, then so can an NPC. And then wealth/knowledge/favors can be exchanged for the creation of items.
I don't see how Monte can avoid a magic item economy without significantly changing the basic properties of magic items. Just going from the fact that you can find and use magical items sort of makes some form of magic item economy inevitable.
To me, this column was a lot of "wouldn't X be great" without acknowledging the fact that there were reasons the game moved away from X.