Germany (or Europe) is more conservative, which means that US trends impact a few years later. Web apps are not adopted as fast as in the US. An innovative idea must not be executed too soon otherwise you fail. So when the time for your innovation is right in Germany, it has been right in the US two years before.
By taking an idea from the Valley and copy it, you roughly hit the right time quite well. In the end the company doesn't get big, because the original Valley company will buy or sue it (see for example Facebook vs StudiVZ).
I'm still waiting for a german Weebly for example. They are probably still to small to translate and localize to multiple languages, but there already is need for it. So i think a german copy would be successful.
This is my theory why europeans tend to copy.
The German 'Mittelstand' (medium sized companies) has lots of 'Weltmarktführer' (market leaders) which are based on innovation and technology in their areas. Software is part of their offerings, but it is not the web-based software what they develop. It is often embedded software or applications. Guess what, these companies are fully exposed to global competition. Actually their market is global - which is why Germany has a huge trade surplus - from selling high-tech, machines, tools, cars, trains, robots, ...
The article is also not really correct with respect to 'Theseus'. Theseus is a german research project in the area of semantic knowledge infrastructure. It is not a start up company and it is not done with France. Theseus is basic research.
Volkswagen is also long ago - it was founded by the Nazis. It is not an example how companies are created in Germany nowadays.
It is true that Germany has less venture capital and its innovation is not that much based on creation of startup companies funded by venture capital. But that does not mean innovation is government controlled or induced. The example I mentioned above, innovation in the 'Mittelstand' is the counter example.
Now, what really annoys me about European entrepreneurs is the tendency to just copy stuff. Like "starting europe's first ycombinator-style incubator" and then "travel to the bay area (...) to get inspiration for my next project". That may work, of course, but there's zero creativity in it.