It does not square with at least some research and what Brooks most perspicaciously noted in 'No Silver Bullet' -- that there is essential complexity in software, and it is the dominant factor. That really seems very opposed to anything anywhere near 100-fold general improvements.
Looking at the VPRI Steps report of 2011-04, prima facie, overall, they seem to be producing a 'second-draft' of current practice, not a revolutionary general technique.
People regularly say they translated their system from language A to language B and got 10-100 times code-size reductions. This seems essentially what STEPS is doing: when you look at something again, you can see how to improve it and do a much better job. But the improvement comes not from the general aspect -- the language B -- but from understanding better the particular project because you already had a first-draft.
This can still be valuable work though, since it is about general things we all use. Second-drafts are valuable, and ones of important things even more so.
But we should probably not infer that they are coming up with a revolutionary general way to write new software.
Substantially because large scale software cannot be designed: it must be evolved. We only know what to focus a second-draft around because we muddled together the first draft and it evolved and survived. You cannot write a second-draft first.
Having said that, if they find particular new abstractions, they could be very valuable. If, for example, VPRI came up with a neat way to express implicit concurrency, maybe, that might possibly be comparable to inventing/developing gargage-collection in common programming languages -- certainly useful and valuable.