I think his argument makes sense (just speaking with regards to encryption - they brought up a couple of things in the discussion), but you have to keep in mind that he's arguing from a completely different perspective than most of the folks posting to HN. Whereas it's usually in the best interest for a private citizen to have all of the data on his/her device encrypted and only decryptable by him/her, it's not the same case for corporate or government data, which is a huge portion of the market.
Baker is arguing from the point of view that a large organization needs to be able to monitor what its employees are doing because they're legally responsible for anything that those employees may do. Imagine having to secure a network where you couldn't look at the logs due to privacy concerns; or figuring out which disgruntled employee is siphoning data off to a competitor; or responding to warrant/subpoena when one of your employees is suspected of committing a crime. You're not in a very good position if the only one who can decrypt the data is the end user.
Not to mention that there are also situations, particularly in government, where it's in the best interest of the public to be able to investigate a government official for wrongdoing. If their IT department can't get to their e-mails when the Inspector General comes knocking, what's to stop that official from just saying "Whoops, I forgot my password." ?