The article seems off base. I don't get how Facebook avoids being all over the place. But, yeah, they did avoid the obnoxious ads (at first), and I can visit someone's page without blasting music or getting an eyeful of html poop.
Could they have avoided losing out to Facebook? I think if they created MySpace 2.0 without all the crap (essentially what Facebook did) and made it easy to migrate your accounts and activity, they could have prevented Facebook from taking over social. But they didn't, and it was crap, and I basically put up a MySpace message saying I was moving to Facebook for all the reasons, and that's where people could find me. And I think a lot of other people followed suit.