It's amazing to me how eloquently you explain what I understand to be exactly the author's original point. You're right, the knowledge doesn't just disappear, it is forgotten because it doesn't serve any obvious short-term purpose. The author argues that, on the time scale of humanity, we would be better off if we didn't let such myopia force us to start anew every time the cycle repeats.

I'm not personally convinced of the specific proposed solution, since it's "Just Another Technology", but I wholly agree that the problem exists, and I think you argue effectively for some of the reasons why.