Edit: Note that the example does try to do some DNS rebinding on the router, but that's the end goal. The attack itself doesn't rely on rebinding. It does require "already logged on to the router" users, but I suspect an attack using default login credentials is possible as well.
I've had a quick poke around my house, and the couple of devices I have (wemo, philips hue) are holding pretty persistent outbound http connections - not dropping their trousers and exposing telnet.
Persistently exposed telnet sounds more to me like industrial control devices, network appliances, etc. But "IoT" is so vague that we're immediately jumping to blaming consumer devices.
"The specific Dahua IPC-HFWxxx old type vulnerable password was the one used to let this in, but that depends on how we apply our traps." http://blog.malwaremustdie.org/2016/10/mmd-0058-2016-elf-lin...
all of these iot devices use upnp to bypass the nat 'firewall'