Some of these sales have allowed me to take a chance on a game I otherwise might not have played. I bought Just Cause 2 and Jamestown for 5 bucks each and played both extensively. I also bought Sanctum for the same price and decided I was done after two levels. I was happy having purchased all three games, even though I didn't like one of them.
For me, price drops affect how likely I am to take a chance on a game that I'm interested in, but not quite sold on. I currently have 30 games on my wishlist, so I can keep an eye on them. I still buy games at the 60 dollar price point, but I have to be sure that I'll really like the game to invest that much in it.
I'm still mulling around a few of the points he made. My gut says that while some of the people who buy a game on impulse won't play it, all of the people who don't buy the game won't play it. I also think that there's a flaw in never lowering the price of the game. All items depreciate in value, even digital ones. Movies, music, shows, and the like all eventually become at least a little cheaper down the line because the distributors realize that the original price is no longer one that the market will bear. I also have trouble with the idea that the industry is being hurt by the sales. I understand the desire for your game to be played and enjoyed, but I also see the desire to have your work financially compensated. Video games are art, like movies, but also like movies, they are a business, with a goal of making money. Also, I understand that the game on his site had higher baseline sales than the one on Steam, but which one generated more total revenue? Maybe I missed it when I read the article.
I think that there are flaws in his reasoning, but only time will tell.