I agree with the substance of this article, and disagree with the author's reaction to it.
The part I agree with:
It is true that watermarking can be done by "just" swapping one PRNG for another, and it is even true that with today's LLMs, it is possible that this will not degrade the output. But it has a cost, and as things improve, that cost will matter. You are intentionally reducing the degrees of freedom in the output, and using those bits of entropy for a purpose that does not improve the quality. If you maximize your tradeoff of bits for quality, those extra bits lower the ceiling of what's possible. It's a very simple information theoretic argument, and the only plausible argument against it (that we're using those bits so inefficiently now that the new PRNG is no worse than the old) only holds in the short term.
I also agree that having TOS that forbid removing the watermarking is deeply, deeply problematic. Hell, the whole essay is well-written and persuasive, and gives good reasons why this is a poor approach.
What I disagree with, and the reason for this comment, is the entitlement.
> The idea that anything other than my needs should factor into the generation of text for me is patently offensive.
This attitude is what is patently offensive for me. This is the argument that the world is beholden to my interests. It says that worrying about negative externalities is immoral. It's another form of certain people being above the law, shareholder profit maximization über alles, might makes right, we have to do it or someone else will, "we just help people connect", {code,a gun,roofie} is just a tool.
So I agree that the watermarking has a cost. But you can't leave out that it is an attempt to reduce negative externalities of AI. Whether it's a realistic or worthwhile attempt is a whole other debate (and Gruber does a good job of debating just that in the latter part of the essay), but saying that the user's needs are the only thing that should ever be considered is reprehensible.