At the time, you effectively could not buy a touchscreen device without a stylus being required. Nintendo DS, Palm Pilot, Windows tablet, etc., it was a bundled experience.
Letting you use not just one, but multiple, fingers on a touchscreen without the need for a stylus was a sea change.
His comments on styluses should be seen in light of the technology of the time (Newton/Maemo/Palm OS/WinCE etc) whose input was stabbing at a resistive screen.
(That's not to repudiate finger input being superior to pen for many interactions but styluses of 2019 use vastly different tech to those of 2007.)
Meanwhile, he was overseeing the development of the 7.9 inch iPad Mini, which wouldn't come out until late 2012.
[0]: https://www.itproportal.com/2010/10/21/steve-jobs-wrong-abou...
I think his comments are general, not about the technology of the time. He's arguing that direct manipulation is better than not-that. That's been a central tenet of UI-stuff for a very long time.
He said it shouldn't be the primary method of interaction with a tablet...
I imagined it would be for that usecase. I didn’t understand the “who needs a stylus” statement, but I guess that is for the iPhone.
He was commenting on past tablets that were meant to be used with a small stylus -- and the interface was totally unfriendly (and sometimes unusable) for hand touch.