Normally, it means having a joint appointment in two academic departments (e.g. Linguistics and Cognitive Science at State U, or in the Department of Linguistics at State U, with an appointment at the Head-and-Neck surgery program at the local med school). This is a well-known and common practice, and although it can be tricky (particularly with even splits, where there's not one true home), it's not a 'harmful' thing.
As the author explains in the article per se, he's talking about an industry/academic split. This is much harder, for the reasons he's outlined, and as an academic, I too am skeptical. It could be a nice idea in moderation, and it'd be great to have more bridges between Academia and industry, particularly given the brutality of the Academic Job Market.
But I can easily see that a professional administrator somewhere deciding that it's cheaper to stock departments with 20% appointees than to actually hire career professors and educators. And as any adjunct-heavy institution will tell you, a department full of moonlighters is no place to make a life. Perhaps more damning, 20% of anybody's life isn't enough to support all but the weakest of teaching, even for a single course, so over-reliance on this will just further damage the instructional core of universities.
So, one or two in a department could be nice, but I don't think it's a great model for the future.