He specifically calls out the use of the material in a place it wouldn't be seen as something that the carpenter making beautiful cabinets wouldn't do, but that's actually something they absolutely do. He's trying to argue some other point by way of this analogy, but his analogy is wrong because he doesn't know anything about it. It would be like if I was trying to argue my point by way of car analogy but the example I chose was to say that car enthusiasts insist on genuine OEM parts, I'm only exposing myself as somebody who doesn't understand car people.
If they do, then they aren't making truly great things. It's as simple as that really.
If you cut corners, even if you think nobody will notice, some people will, and your product will never be truly great. Steve understood that.
“When you’re a carpenter making a beautiful chest of drawers, you’re not going to use a piece of plywood on the back, even though it faces the wall and nobody will ever see it. You’ll know it’s there, so you’re going to use a beautiful piece of wood on the back. For you to sleep well at night, the aesthetic, the quality, has to be carried all the way through.”