They still rely on this dumb word-based approach to document retrieval. Example, if my page is about how to manage your time, and it's a really fantastic resource about that, but I don't actually mention the phrase "how to manage your time" anywhere, I won't rank for people searching for that phrase. I should, but I won't.
So I have to write my content for two audiences - humans and Google.
I don't want to do this. I'd be much happier just building great content for my human readers, and if I happen not to mention the exact keyword phrase a searcher might use, it doesn't matter, Google still knows it should put my site at the top for that phrase, because it understands that my site is about that phrase, even though I don't mention it exactly.
But Google just isn't good enough yet. Someone can set up a page which has a bunch of headers and URLs and variations of the keywords and beat me to #1, even if their content is utter rubbish for human consumption.
That's why SEO still exists. It's symptomatic of a bug in Google.
This penalty will help, hopefully, but we're still going to be in a state where we have to compromise our content to serve two masters.