Yes. I'm leaning towards a "didn't really think it through" oversight on the author's part, rather than fundamentally confusing signal-to-noise ratio (which is what more bits give you, if you treat em right) with numerical range.

Hell, I like to think I'm somewhat knowledgeable about these things and I read straight past that line thinking "that's a million, that's about twenty bits, okay".

But you are absolutely right, now that you pointed it out it's obvious.

And indeed you can get the same range using only one bit (per channel, that is) and if you had high enough (very high) resolution and proper dithering, you'd totally get away with it, too. In that case, the tonemapping goes just before the dithering.