It's certainly fear, uncertainty, and doubt, but usually when people use the term "FUD' they mean to imply that the fear, uncertainty, and doubt are unfounded. But in this case, all three are justified. The article mentions that Nature and Science are open to papers that have been pre-published. But I believe that many biology journals still have a blanket policy of not considering papers that have been pre-published. If that's the case, the working scientist is highly motivated to not pre-publish, since it shuts the door to later (peer-reviewed) publication. Unless, of course, the scientist is 100% sure they can get it published in Science or Nature. And in practice one is almost never sure of this.
I'm always curious to know how physics, as a field, got over this and related humps. Was it just easier to get everyone on board because it's a smaller community? Were the journals not as savvy to the fact that pre-prints are not really in their interest?