> I imagine they're using genome size (number of bases in exons) as their measure of complexity, not something ill-defined.

They're taking genome size and trying to relate it to time. And the way that they're doing that is to take organisms from the present day, and imagine some of them in the past. The less "developed" or "complex" an organism is, the further in the past they put it. That process is the flawed part.

In other words, the y-axis (genome size) is well-defined, but the mapping of organisms onto the x-axis (time) is not.