I feel like the historical analogy is more like the Last Days of Empire (British? Roman?). The shift to mobile has left Microsoft behind, and it is desperately trying to stay relevant while iOS and Android become dominant first in consumer use but soon in business use as well.
I'm not so sure about its claims about Asian manufacturers likely to turn out market-winning low-priced devices, either - I've been considering picking up a made-in-China tablet for a while, and the prices aren't so much better than the Nexus 7's $200 (a dual-core would be $100 or more right now). And as you point out, Google cares about having tablets run Android, not about profiting from the hardware. What are all the Chinese manufacturers loading on their tablets? Android ICS, essentially without exception.
I do think having an official, well integrated keyboard would be very beneficial to the tablet's ecosystem. That's where the Surface wins - I can almost see it as a light laptop replacement. The writer is certainly correct in painting this as important.
At one point he claims that few years from now we'll all be buying the cheapest tablets made by asian manufacturers who'll outcompete everyone on price, because "no one cares whose tablet we use as long as it does the basic stuff".
Then he contradicts himself by saying that Microsoft will win the tablet war because of more desirable software. I guess we do care about the software in the tablet after all.
More fundamentally, even if Google totally fails in tablet market, they'll still be making money hand over fist from their web ad business and from their youtube video business.
Google doesn't care about profits from selling hardware that much. I'm sure they would like to make Apple-sized profits but they are strategic enough to sacrifice those profits to defend their ad cash cow.
Low prices are Google's weapon - as long as a tablet runs Android, Google most likely makes money from the person using it so if they could give Android table to everyone for free, they would. Apple and Microsoft don't have that option, they have to sell them at a profit.