Basically his “35-year mistake” thesis is that we almost had ECS, the entity/component/system pattern, in 01963 with Sketchpad, but it took until 01998. He explains this near the end of the talk proper, and explains how Looking Glass in 01998 introduced the pattern in Ultima II Underworld, but really introduced it with Tom Leonard’s Thief: The Dark Project. Later though he seems to be saying that he's not sure ECS is actually a good idea, but he thinks encapsulation is, if not a bad idea, at least an idea that should be applied carefully to keep it from getting in your way, and definitely not in a way that reflects a division among problem-domain objects such as cars, trucks, bridges, circular arcs, lanterns, etc.