If they, and Bos, have any clue about what they are doing, they should tell us how to solve this problem, instead if asking the inane question you put in their mouths. What Bos comes up with in his essay is basically 'search-and-replace' and other 'tooling'. Well, why don't we just drop variables in our programming languages as well? We can just 'search-and-replace', can't we?
"adding another step to the build process"
is worse than
"permanently standardizing one group's notion of what variables should look like when less than 1% of all web applications use any form of CSS templates"
I don't have to agree with Bos that high-level stylesheets are a bad idea (I don't; I think they're a great idea) to agree with him that we shouldn't be inflicting them on everything that renders or interprets styled HTML.
And hey --- for what it's worth --- I can see how Bos didn't do his argument a big favor by writing an essay-length rant about why variables are a bad idea. I think he raises some good points. For instance, have these proposals really thought scoping through, and have we really thought about how this will impact authorship tools? But these aren't the reasons we shouldn't be in the business of standardizing the idea.
On the other hand, Matt's argument is just as wrongheaded. It is absolutely not the case that standards groups should be rushing to alleviate web developer pain. Like I said, if they took that approach, we'd be stuck with QuickSilver templates, baked permanently into the HTML standard.
It's not just about the effort for browser developers. It's also about the effort of getting all the browsers in use to be more-or-less compatible with the standard.
Indeed, instead of Bos ignoring this guy's argument, it seems to me it's the other way around. The standards body's response to "add variables to CSS" is "why? that's an application-layer concern, easily handled by any web development framework, which has nothing to do how browsers actually process style information". The onus is in fact on the advocates of extending CSS to explain why this feature is so important browsers should be required to implement it.
It's also just bad engineering to add features at lower layers that are just as effectively handled at higher layers. The end to end argument in systems design doesn't just apply to network protocols.