This article is deeply flawed, primarily because it parrots the common misconception leveled against the formula, and options market by association (by none other than Taleb himself - who obviously knows better but prefers to act like a self-important bafoon).

Here is the crux of this misconception - that traders assume a Gaussian (ie Normal) distribution of events, while the world is far from "normal". THIS IS ABSOLUTELY WRONG. Traders and investors know that the world is full of "Fat Tails" and price the options accordingly. This is what's known as the Volatility Smile [1]

[1] http://en.wikipedia.org/wiki/Volatility_smile

Moreover - the formula is not used to predict anything. It simply converts a trader's expectations of future events (ie volatility) into dollar figures - price of the option. So the sentence "Black-Scholes changed the culture of Wall Street, from a place where people traded based on common sense, experience and intuition, to a place where the computer said yes or no" - is absolute nonsense. People still trade based on common sense and intuition - BS is merely a way to convert views in numerical figures.