I'm not sure why he dismisses the FileAPI right away... one of the goals of the Reader according to http://www.w3.org/TR/FileAPI/ is:

User agents should provide a streamlined programmatic ability to send data from a file to a remote server that works more efficiently than form-based uploads today

Example: A Video/Photo Upload App. User is able to select large files for upload, which can then be "chunk-transfered" to the server.

This means that although this XMLHttpRequest2 method is nice, in practice it will still suffer from all the issues that http uploads suffer from at the moment. Chunked uploading, which the W3C spec explicitly supports, would be a much better solution for large files, no?