Meh. I agree that "selling content" rather than "selling books" is the way that IP sales are going, but that's been evident for some time (see DDI, iTunes, etc). And giving away rules for free because you make more money on supplementary material is not an uncommon strategy in the gaming world (many miniature games use it, etc).
But the augmented reality junk? I can't say it will NEVER happen. But the technological hurdles are enormous. Not the technological hurdles of making augmented reality as he describes it in general, but rather the technological hurdles of making an RPG that works well with it. There are hurdles in terms of purchasing cost, in terms of interface, in terms of scope of game, in terms of development cost (imagine trying to do graphics for everything in D&D, ever), in terms of the compromises you'd have to make to bring those earlier points into a scope you could achieve, and so on. I feel pretty confident that we're far, far away from augmented reality gaming as anything other than really really fancy MMORPGs. Which is cool and all, but I think most of us recognize that, while MMORPGs and RPGs overlap, they are not coterminous.
Once upon a time, if you were a scifi/fantasy/gaming nerd, D&D was about your only choice. So in that time period D&D was very strong. Now there are lots of choices, not only of tabletop RPGs, but of entirely new areas of hobby gaming: the board game revolution has occurred, computerized gaming has arisen (and includes several of its own subgenres), CCGs have been invented, and so on. So naturally D&D has become less prominent. Of course it has, its no longer a monopoly. But that doesn't mean that tabletop gaming will inevitably die as the new kids on the block take its customers. If you think that tabletop rpgs have some characteristics that, at least as of yet, have not been well mimicked by other gaming options, then that just means that tabletop rpgs will reach their equilibrium in the market.
I think that there are certain advantages to a tabletop RPG that are not well emulated by other genres, particularly gaming with significant computer aids. Specifically, tabletop RPGs allow you to diverge beyond what someone else thought up when they wrote the game, and they allow you to easily create your own content with almost no preset boundaries. These are not trivial technological hurdles for a game that operates through a graphics viewer.
That being said, bring on the RPGs with computer supplemented combat resolution. There will be some early adopter issues there with regards to cost, but it could be quite cool.