It's an interesting essay that diagnoses some trends, and before reading it I thought that I would feel the same way you do, but I find myself disagreeing with it - possibly because I haven't encountered the full unpleasantness of the mainstream market yet, or because I'm all about the Joyce and Eliot and elitism and opacity (even in my genre reading, actually), but mostly I think that for every literary magazine full of "Manhattan Angst" stories, there is a bookshelf full of badly-written (but well-selling and -marketed) Tolkien-lite fantasy with a scantily-clad woman on the cover, and one shouldn't judge any category by its worst and least-original examples. Also, I'd argue with what his definition of "postmodern" seems to be, which is "just like modern but more so".

My own view is that it's not that "literary" or "genre" fiction is inherently better or more original, it's the way the distinction is managed (by trolls. with sledgehammers.). And I love that there are writers (postmodern writers!) now who are set on blurring those boundaries.