Theoretically you can have arbitrary contrast with 1 bit (white = looking at the sun, black = 1 photon per square centimeter per year, or whatever). The author probably has some specific amount of brightness discrimination in mind that he wants to adequately capture. For example, with brightness levels corresponding to just-noticeable differences in terms of human perception, after adapting to looking at that specific portion of the scene.

In practice modeling vision precisely gets really complicated because there are several types of spatial and temporal adaptation and contrast effects that the human visual system can undergo / be affected by, and something like a video game definitely doesn’t have the computation available to handle it perfectly (not to mention the programmers don’t want to implement anything that complex and finicky). There is also a complication that display black is never especially close to zero light, and depends a lot on the light hitting the display. Etc.

So for practical purposes you just have to come up with some kind of “good enough” heuristic.