"it’s hard to imagine that today’s tepid consumer and business markets have room to absorb all of the products and services offered by the hundreds of new startups that the incubators are now churning out each year."

I think he's overlooking the element of disruption here. While it's true that certain markets will need to expand to fit these new companies, many of these startups are entering markets with the hopes of exploiting inefficiencies in more traditional companies, or simply doing things better.