I think the point of Mills final statement isn't a combatfan argument but rather he's saying that videogame writing works best when the story is actually integrated through gameplay.
For example, the way the story can unfold in Fallout is something no book or film can pull off. Accidentally openning the secret passage in the Cathedral to find the truth behind it early on in the game can setup a very different story compared to going through the storyline on the more 'conventional path- again, that's an experience that a novel or film will never be able to provide as it gives the player control over their own storyline and in a way that's more tangible than LARPing bullshit headcanon.
Torment and other stuff by Avellone and other
writers have done a lot towards being able to integrate story and gameplay together to establish a type of storytelling that only the gaming medium can provide. I'd hardly call that an inherently worthless pursuit.