Agreed, the author is using "disruption" to mean "compete with". Microsoft did not really disrupt IBM, it just changed the competitive landscape.

The Innovator's Dilemma has a much more nuanced view of disruption: an inferior product that ends up beating the entrenched player because of a side-benefit. It's pretty relevant if you want to take on eBay, LinkedIn, or Google: you're not going to build a better search engine than Google, but you can build one that respects privacy, runs without ads, etc. if that's what users really care about.