I think you have the roles backwards. He was the one explaining (at first) how bitcoin wouldn't scale -- couldn't scale -- because the generated value doesn't adjust with the difficulty, when in fact that is fundamental to why bitcoin DOES work and prior schemes did not.

Which is fine. Nick was only just starting to learn about bitcoin at this time. I didn't understand this until much after I was first exposed to bitcoin, tbh. Much of how bitcoin/crypto works, although we take it for granted now, was very non-obvious to people working on ecash-like systems at the time. Bitcoin basically violates every inviolable constraint that cypherpunks had put on digital money systems.