I disagree wholeheartedly. The article is based around the fallacy we've seen time and time again, of throwing more cryptography at a problem that cryptography alone cannot solve. In the end, a crappy password is a crappy password. Successfully discouraging your users from using a crappy password has much better repercussions (for the user, for you, and for the web in general) than switching from a hash-based authent…
Yes, many users pick crappy passwords. That's a social problem, one that is difficult to address with technology[1].
Storing passwords on the server is unrelated to whether or not the user picked a good password. If an attacker gets ahold of a copy of your database, they will have a much easier time of turning SHA1 hashes of passwords into actual passwords than of turning bcrypt-encrypted passwords into actual passwords (the latter being orders of magnitude more difficult, maybe to the point of being impractical as a target vector).
[1] You can always do things like require certain types of password complexity: minimum length, choice of characters from different character classes and cases, etc. But then you end up just moving the problem elsewhere: instead of using the crappy password they remember, the user has to write down their complex password, or maybe even store it in a text file on their hard drive.