Haven't read the piece but no video hosting. 140 characters of text including spaces. You know the drill!
Twitter's position is sound: if the site were to duplicate the functionality of existing apps, it could undermine the trust of developers who invest huge amounts of time, money and energy in creating applications for the Twitter ecosystem.
That said, Twitter does lose out when it comes to multimedia: adding in-line thumbnails for images and videos (even if that content is hosted on 3rd party sites) would make for a much richer experience that could match Facebook's news feed for image and video sharing. Yes, in-line multimedia can be done with apps like TweetDeck, but that's non-obvious and an extra step for those more familiar with the leading social network. Even this could bring Twitter into conflict with developers however: if multimedia support were added, would there be default services in the same way Bit.ly is the default URL shortener?
Such moves would be made with caution, if at all. Stone's comment sums up Twitter's philosophy nicely: keep it simple, with as few extra features as possible.