I wonder why he doesn't use Linux, seems he could build whatever he needs and forget the bloatware of windows. Specially with a distribution like Gentoo he could build a custom system and not have to have the technology drawbacks of Windows 95.
But then again, if he's got all the apps he needs, running as well as he needs them, and isn't bothered by being unable to run newer applications (which he pretty clearly states at the end of the essay): well, more power to him, I guess...
Yes, with today's hardwares, Win 95 is fast in performance. But I believe Puppy Linux (just 88 MB) in my USB drive performs a lot better than Win 95.
Anyway, I doubt any overhead of the X protocol is visible on a modern machine. With two cores, the client and server can both run at the same time, and server operations are so fast you wouldn't notice anyway. I certainly don't notice any delay, although I do see that X has used 495 minutes of CPU time on my machine (in 9 days). (Compare that to 285 minutes of CPU time that emacs has used, and 137 that Firefox has used.)