Desktop only in this day and age is pretty anachronistic too.
It has less to do with the quality of the service, its ease of use, or whether or not people actually like using it than the above note about entrenchment.
EDIT: Come to think of it, this is an interesting attempt at manipulating people. He claims that Outlook is an outdated piece of technology straight from the 90's and literally paints the picture of a dinosaur. Tech people - who are probably the main target audience for this memo - oftentimes take pride in being in the know about the latest technologies and invest quite a bit of time and effort in being on the bleeding edge. Those paragraphs are actually an insult in disguise designed to get people by their pride about being behind the times.
1. If you're going to promote design-thinking in a company (which I believe Yahoo needs to do in order to grow) than making comments like this is a disservice. This creates a culture of "well if it's old and looks like shit then it must be shit" that should instead be "listen to your audience".
2. This is also talking about the sentiment from outside of Yahoo (and possibly in the echo chamber of HN). I get why Yahoo internally would say it, which I would then revert back to my point #1.
I don't get this sentiment. I know plenty of people who are very productive with Outlook and see no reason to sway them away from it. In fact this is why Office 365 is killing it right now.