I like that you can slurp a file in two lines of Python. And for someone just learning Python, the author's solution is just unnecessarily complicated. How many people learning Python are going to have a need to optimize file reading to this level?

And besides that, the author's solution is just good for one situation: when you want to read something line-by-line, which isn't always the case. For binary files, you may want to do something like this (untested code):

    data = infile.read(256):
    while data:
        do_something(data)
        data = infile.read(256)

Also, it seems like the author hasn't heard of enumerate: http://docs.python.org/2/library/functions.html#enumerate