I agree that your definition of science is the proper one, but then it makes distinguishing between engineering and science very difficult, doesn't it? I would guess that the classical scientific method (observe, hypothesize, test, iterate) is actually used on an every day basis more often by engineers than most basic scientists.

That said, as a physicist quite far removed from any applications, I staunchly agree with the thesis of the article: "Although a good deal is already known about those things, it certainly would not hurt to know more, but what would really move things forward would be investments in engineering."

I think most people outside of a particular corner of academia don't realize how less compelling the case is for basic scientific research leading to applications than it was (say) 50 years ago.