Deflation means, that the most fundamental law of finance is broken. The law, that says: It is much better to be given one dollar today, than to have one dollar next year.
Deflation does not break this law. It is always better to be given one bitcoin now than one bitcoin in the future - if you get it now you have the option of spending it, which has value. (If 1 BTC is worth 4 bags of pot today and 5 next year, 1 BTC in a year is worthless to me if I want to smoke now.)
He then argues that investment vehicles with a positive rate of return reduces consumption. This is true of both BTC and SPY. Unless bitcoin has the highest rate of return of all investment vehicles, the effect on consumption is irrelevant. I.e., if bitcoin has a return rate of 1% and SPY has a return rate of 2%, bitcoin will not affect the savings rate or reduce consumption [1].
If you are worried about people investing in bitcoin, consumption is irrelevant - the worry is that people will shift investments from SPY to BTC.
The fundamental problem with deflationary currencies is nominal rigidity. If you argue against deflation without mentioning this, you don't know what you are talking about.
http://en.wikipedia.org/wiki/Nominal_rigidity
tl;dr; Go learn Keynesian economics from a textbook that does math and carefully states assumptions. Don't learn it from newspaper columns.
[1] I oversimplify slightly. Since SPY and BTC are likely to be minimally correlated with each other, you can construct portfolios of both securities which will likely have a higher risk-adjusted return SPY alone. So the portfolio rate of return might go up a few bps, and consumption will shift a little bit towards investment. This is a small effect.