He's obviously talking about the ones that aren't, such as the 'Discover Weekly' and the way it will guess at what to play next after an album finishes.

I believe his point is that the algorithms don't generate playlists or dj mixes with the same polish as a professional human and I'm inclined to agree. That said, I do think their recommendation engine produces decent results, but I don't think the composition of the list is something it focuses on. Rather its just a list of unrelated tracks it thinks you'd be inclined to enjoy on their own.

Exactly. A playlist full of tracks chosen at seeming random lacks the inter-track context that a DJ can add through his choice in selections. Auto-generated playlists have no sense of flow and transition.

You can similarly ruin a good, curated playlist by hitting shuffle.