I don't see storing non-sensitive environment variables unencrypted as the main issue here. Sure at vercels scale, encryption at rest for any data would add some better baseline, but i see this article as two major user interface fails more than anything else. Oauth dialogs are just pathetic, they are years behind what is required and what UX research knows how to do things, none of the companies invested any amount of resources into it after it just worked well enough not to make most users churn. The env var problem is also ridiculous, you can only update, not see and check values in the interface if they are encrypted for most providers i know, that leads to really annoying UX and is the reason they are not marked as sensitive by default and opt out. Even if you could unlock them to edit, no one will enter their password again as that is too much hassle, meaning we need a way to read and edit encrypted env vars in the interface where they are created but not have more in the way than a passkey dialog. Its doable but afaik no provider would go the extra mile to get to this UX.
(Of course there are tons of other red flags not looked at in the article, eg. how does an employees machine get access to production systems and from there access to customers connected with oauth and how does the attacker get to env vars from a google workspace account)