Yeah I just figured that it wasn't to scale... Looking on http://phone-size.com it seems like it is to scale. So that diagram is clearly biased and hurts his argument, but I think that what he says is still valid.
I don't see any advantage to having a bigger screen. Especially when the bigger screen has less pixels (i.e. Galaxy S II). In that case, you actually have less pixel space for UI elements, text, video, etc. than you would with the smaller, denser screen.
http://dl.dropbox.com/u/6857506/3.5in.png
Purple is the Galaxy SII circle. Orange is the iPhone circle.
Apparently the iPhone gives you magically larger hands for your smaller device. The confirmation bias is so thick it hurts.