So whats the alternative? Letting it codegen a file and the piping that? What a worse workflow

Alternative is to fail the validation and regenerate the request, but I have no idea what this person is talking about. It is absolutely not the case that everyone has moved on from structured generation. Absurd claim.

sounds like an argument in favor of structured output, is that right?

Not sure why you think everyone has moved on from this. Valid JSON is only one aspect. It almost certainly has far more uptake today than ca. Sonnet 3.7. Grammar engines can enforce a lot of other things too. Models are actually really good at emitting valid JSON, but complex schemas effectively require it.