The idea of using incremental search transparently for both navigation and retrieval does appeal - I could see adding that to Emacs, as a union of isearch and occur, maybe - but we've learned a lot about interaction design in the intervening decades which leads me to feel the veneration of Raskin may often obstruct evenhanded critique of his work: as with Jobs, people seem to confuse the appellation of "visionary" with a guarantee that its recipient's vision was perfect.
AFAICS only that there is a mode.
Glue some little mechanical contraption onto the Cat's keyboard to hold down the Search key until you nudge the thingymabob again to release it, and it's just as (semi-)“permanent” as CapsLock. (AFAIK, that's exactly how CapsLock worked on mechanical typewriters.) The fact that they didn't build that into the Cat's keyboard in the first place is just an implementation detail... That seems very much like a feint to avoid admitting that there's no “quasi” about it; a mode is a mode is a mode.