I guess hackers and programmers are quited used to doing this over the web, though.
50% of the value is the content of the talks, which supposedly described the latest and greatest.
Just like in academia, the talks are actually dated: they have been prepared months before and don't really represent the latest. To know the latest, you need to chat with various people to find out what they are working on right now, that they can't quite announce yet.
What's on stage is canned, in a sense. If you want to be in, you got to be there in person to catch where the future is.
This has held true for me both in academia (research) and web 2.0.
You do need a way to gather interesting people in one place, but you don't need a traditional conference (especially an expensive conference) to do so.
Conferences aren't so much about the presentations as what happens after the presentations.
Of course, this guy is a VC, and he's not so interested in the technical scene. He also seems to be talking about invitation only conferences, which are slightly silly.