I read the quoted text as "Xanadu's 'transclusion' can't work in the real world because of copyright and legal issues." But neither of those are issues for popular existing technologies.
Rereading your parent comment, I'm guessing my confusion is in connecting that quote to why Xanadu fails to solve "the concrete problem" or endorsing "a solution in search of a problem"/addressing "worse is better."
My comment was intended as a +1 to @Rygian: Xanadu was prescient wrt. file management and an opportunity to push back against Freenet=CSAM
Rereading your parent comment, I'm guessing my confusion is in connecting that quote to why Xanadu fails to solve "the concrete problem" or endorsing "a solution in search of a problem"/addressing "worse is better."
My comment was intended as a +1 to @Rygian: Xanadu was prescient wrt. file management and an opportunity to push back against Freenet=CSAM