This isn't a prescriptivist argument about language itself, it's an argument about a spelling convention (One which is arguably more accurately descriptive of the usage of the words.). Your dictionary link, by spelling "set up" as separate words when used as a verb, agrees with the author.
It's possible that language changes will result in "set up" becoming a fixed, atomic phrase, at which point writing it as one word would make sense. But since both"I'm going to set up the computer" and "I'm going to set the computer up" still sound perfectly natural to my ears as a native speaker, I don't think we've yet reached that point.