The block chain solves the distributed consensus problem in a way that is robust against attacks. That's what is so costly. Paxos requires that every node be trusted.
The problem the article is getting at is emerging as a core technology problem. Either your security is feudal, the you don't own it model, or you are responsible for admin. Few people have the knowledge or time for that. So in that model it becomes the Internet of someone else's pwned things. Now instead of your car not starting because you're late on a payment, your car doesn't start because someone who heard about your blog on 4chan doesn't like you.
I think solving this problem in a way that is neither feudal nor opens everyone to attack is a core tech problem of the 21st century. It's an engineering problem, and no I don't think the block chain solves it. Block chain schemes as a class are too heavy and have scalability problems. They can work in some domains but not this one, and not universally.