Given his work on Smalltalk, I suspect he means that he prefers the line between language runtime and operating system to be erased, and they be the same thing.
I disagree though. While there are benefits to that approach, I feel like language innovation would be stifled to a certain degree.
that seems backwards to me. one of the primary constraints in language development is the OS api. programs that don't interact with the world are increasingly less interesting, and you really have to work hard and be clever to change the file and its semantics, the socket, or the thread. these things have sharp edges and tend to be leaky.