He's sorta right in the sense that most people like a "relaxed" character in the out of focus areas which is very hard to achieve with tiny sensors and lenses (while for example basically every modern large format lens is extremely "creamy").

If the statement was that it’s hard to make a tiny lens for a tiny sensor with good bokeh, then I guess that could be correct (I actually don’t know if small lenses can produce pleasing bokeh). I read the comment as the common “bokeh=shallow depth of field” misunderstanding, though, because the focus was on sensor size rather than the lens.