That's because you're a veteran of the industry he's talking about. I see this as directed at people less familiar with 3D game programming: "This is a reminder that our simulations are less complex than reality by orders of magnitude, despite what you see while playing Crysis."

I agree that the focus on "photorealism" as it pertains to graphical rendering techniques was a bit off, because he was also talking about animation and kinematics, content generation, and good old processing horsepower (i.e. we already know a lot of math that would make more accurate simulations but it can't be done in real-time). Again, the tone of it feels like he was responding to a more populist sentiment (e.g. "photorealistic" catching on as a buzzword maybe), but I think a better term would have been the more general "digital simulation of real-world phenomena" rather than just "photorealism."

I think it's mostly just a "hey guys, we're a lot farther away than a lay observer might think, here's a few reasons why."