Almost right, except one thing: I think Theo de Raadt wrongly did not acknowledge the valid point of his opponent: in practice, separating applications into virtual machines does have some security benefits, when compared to running them on single OS.

I think security guarranties are better if you follow practices of a little selfcentered project such as OpenBSD (run only trusted code) than if you follow practices of QubesOS (running whatever untrusted code you desire in Xen domains and relying on VM separation).