The guy clearly speaks in circles in Japanese, which is hard to translate well as it is so I wouldn't so much say 'piss poor' as that the guy is hard to translate.

On the other hand what he's saying seems clear enough to me so I'll lay it out below:

1) when designing MGS4 he didn't think about HW right away but what he wanted in title only (not uncommon approach whether for games, films or books)

2) then, as they explored the design concepts with tests, and began looking at how to translate the design to the actual intended HW (PS3) it began to be clear that not everything was going to be feasible

3) as a result of 2) a final design was settled and developed (no doubt with multiple loops as they learnt HW and found other issues plus things they could do they thought they couldn't originally)

4) Once game is locked final optimization would take place (or still is)

So what he's saying is no different than (if you look online) Epic talking about locking in GoW features, dealing with no HDD and working out how to balance that loss with streaming data, etc. or any other major game (all of which will have almost certainly lost features originally thought about early on due to HW constraints).

The issue was that his comments on the matter (delivered with Japanese mix of candour and reserve) were totally taken out of context in West and seen as bashing PS3, implying it had limitations that screwed game, etc. which was not the case nor (more importantly) what he was saying.

To the best of my knowledge almost every major action film and game like this will lose lots of ideas big and small as the reality of budgets/time meet creative inspiration.

As an example look at AC - that damn thing is great in parts but clearly barely complete.  Reading around its pretty obvious that by the time most of the budget had been used up they had a great engine, some game concepts and three amazing cities to run around with very little to do in them.  A final effort and you have the same (very simple) tasks repeated across a number of interations and an obviously tacked on ending that deliberately strings things out by abruptly forcing you into boxed in combat a repetative number of times to give a bigger sense of an ending than their actually is.

Another example from a different perspective is Crysis.  In that case I doubt Crytek dropped much from their design in terms of scope and features of the game, but as a result delivered something way beyond general level of HW to actually run the damn thing. 

With MGS at least it looks like despite having to cut down a very ambitious scope there is still a lot of game there and its going to run pretty well on its chosen HW also.