I also think what the author describes would ring true for writers (a different kind of geek), thus the market viability of writing focused writing tools.

Using WYSIWYG with predefined styles is more writing focused than messing around with TeX, I would think. I think the author seriously misrepresents the way Word is poised to be used today (could be that he's accurate about what Word was like back then, though).

Styling your text has absolutely nothing to with writing. Consider that if you're writing with pen and paper you're not styling your text, you're just writing. A good writing tool should facilitate focusing on writing (no distractions) and augment the organization of your writing- that's about it.

Presentation is a whole other step that you get to when you've actually written something worth reading.

I don't see how adding a predefined style called "level 2 heading" to paragraph would be more distracting than adding a "/this is a level 2 heading" TeX command.

That said, I think having a catalogue of suitable elements for each context and a (modifiable) document structure tree is better than either of the above alternatives.

I disagree. If I'm writing something for others to read then the presentation is an integral part of the process. Knowing how it's going to be laid out strongly affects what is written.