In the interview, he doesn't really address the damning points that Notch brought up.

You can see in the demo that the "world" they created is just the same few objects repeated zillions of times. It's obvious that data size for a more convincing variety of objects is a challenge.

Also, the animation he shows is just a bunch of grouped objects shifting around with basic rotations. That's not the same thing as making an object animate so that it looks flexible or skin-like. Notice that there is no wind blowing the branches of the trees around. It would be a monster task to manipulate that many "atoms" to do so in a natural-looking way.

If there is a game that would make sense to take place in a perfect space vacuum with battles between unlimited numbers of the same two plastic GI Joe figures, the future is right around the corner!