Why do games need mechanics?
What is the purpose of rolling dice if the DM and players can just collaborate on a sequence of events for thier story?
Why does it have to be an all-or-nothing dichotomy? What about the phrase delivers ultimatums like "there will be no dice-rolling whatsoever," "the end is predetermined," and "improvisation is taboo"? What you describe doesn't have much resemblance to the collaborative storytelling RPG sessions I've been part of.
It may be that you don't have a lot of experience with games that have narrative systems, but it just isn't true that a game that's about storytelling must by necessity not have mechanics. Again I cite Once Upon a Time. It's a pure storytelling game, no roleplaying at all — and it has mechanics, even a random element (in the form of cards). That's what makes it a game.
Why do I feel like such an old fart?
To be honest, it seems to me as though you're adhering to a single conception as to what "storytelling" means in roleplaying games instead of experience with multiple approaches to how it's actually used. You describe "storytelling" as though it were strictly a process of recital and of pre-determined endpoints to a story, even though there's nothing intrinsic about the concept of storytelling in RPGs that imples those things need to be present. All the best games that do invoke narrative conceits avoid pure recital and pre-determined endpoints like the plague.
To maybe show you what it would look like from your end, imagine someone insisting that old-school D&D consisted entirely of pre-packaged modules and playing through the random dungeon generator in the back of the 1e DMG. Assume his definition of "old-school" did not allow for designing your own dungeons, or wilderness or city adventures. You would probably challenge it as inaccurate. That's kind of what's happening here — you're promoting a definition of RPG "collaborative storytelling" that just doesn't include what a lot of other people have been doing for years. Including, in all likelihood, the folks who wrote that chapter of the DMG2.
I mean, they may prove me wrong. It might be that they want to throw out dice and surprises and mechanics and all sorts of things that are already present in pretty much every other RPG out there that considers itself a subsect of storytelling. I don't see why they'd want to, though. There aren't a lot of us who enjoy storytelling who would find such a thing fun.