The cheese factor of the story was pretty high, but the points it made are so important that I wanted to cheer (I opted not to, would have been disruptive and rude). I got my UCD training at my previous job, but even there I ran into issues with getting development teams on board with the principles of UCD.
The principles of UCD are simple, almost common sense, but for it to be truly useful you have to have buy in from everyone in the development team. This story is quite naive in that all the clients the man spoke to had bought into it; the reality can be pretty different. The concepts that the story presented are so simple, and yet corporations struggle with this still. Some don't have a UX team to push for these principles, others hamstring their designers with fast deadlines and focus on specific feature requirements. Many corporations are not design driven, and thus it's hard to push for these principles. Agile itself wasn't designed with UX in mind - designers have to be a sprint ahead in order for the designs to be passed off to developers in time for their sprints.
When you can get people on board with the process however, the success factor is huge. I remember my first ethnographic studies, and since it was in a field that I knew nothing about I couldn't assume anything. Even the people I was working with had been the users at one point, and they found that their thoughts and ideas were sometimes disproven by the research. It made our lives as designers easier because we could point to concrete evidence to back up our design decisions.
Design is sometimes about aesthetics - there's a reason that apps like Path were and continue to be wildly popular - but at the core of design is the interaction and having the quantifiable measurements from usability testing is important. I might be biased here as an interaction designer, but let's face it - something being pretty isn't enough, if it's not usable people will not use it.
My favorite part is the graphic at the very end with the UCD steps - it's getting pinned to my wall.