He's right - if he means in context to other mediums.
Sorry guys, but ME has good storytelling for a videogame but pretty weak storytelling in context to other mediums.
In my editorial, I argued that ME2 actually had great storytelling, just not in the conventional sense of the word. Its strength came through the squad members and how you treated each of them, whether you helped them out with a loyalty mission, and how you treated them onboard the ship.
The overall story, though? Yeah, still pretty weak. Where interaction can replace stagnant stories is through manipulating the environment, not the overall story. As others have said, games with one ending are often the strongest because so much effort was made in creating a cohesive environment from beginning to end. The more interaction involved, the "weaker" that cohesive story becomes.
What can games do to combat this? Take the BioWare approach, IMO. Let players really commit to their choices and let the surrounding characters mold their experience for them, even at the expense of overall story (did anyone REALLY care about the Illusive Man more than Miranda or Mordin in ME2?).
Anyway, back on topic. Jaffe has valid points here. There is still a detachment from selecting "slap that bitch" and watching it happen versus watching a slap happen in real time. Through using different parts of the brain to control the order and being revealed the action's choice before it happens, it slightly removes the player from the experience.