Only in the same way that it applies to, say, a tree. You can never observe a tree directly. All you can do is infer it from the nerve signals coming from your retinas and touch receptors.

The point of the dragon in the garage isn't that you can't measure it directly. It's that you can't measure it at all. It has no observable effects at all. Software definitely has observable effects, as do trees and almost everything else that people accept as real.