Yes I have to agree with the two of you. That was my first thought upon finishing. It's odd Dalton doesn't define one or two solid examples of what this successful cloud API could be.
I felt that discussing alternate business models was outside the scope of the post for 2 reasons: 1) I am an outsider, and no one understands what could or could not work better than the people working at Twitter. I am not sure what the pro-API camp inside of Twitter had in mind. 2) Debating which model would work better would derail the points I wanted to make in my post.
I do think there are several large cloud companies that have both their "native" UI and rich/powerful APIs. For instance Salesforce, which my company both pays for & extensively modifies and extends via their API. Given the attention this post has attracted I may write a followup post just on this topic.