He's referring to Loopt (and others I suppose) when he says "The other companies built elaborate infrastructures: e.g they partnered with wireless carriers so that users’ locations could be tracked in the background without having to “check-in”."

This is the kind of mistake that burns so badly. You find yourself saying something like "You mean you just ask them to update their location manually and that works?"

It reminds me of when Ballmer was bragging about how sharing songs via WiFi on the Zune could get you a date. Then Steve Jobs recommended simply giving one earbud to the girl.

The differencing between trying to untie the The Gordian Knot and taking a sword to it.