Yeah... he makes no sense.
FLAC is just like ZIP or RAR in that it compressed the data through cool coding but in a way which can decoded on the fly for streaming media.
And, he is correct, what matters is the source - even if it was recorded in 192 kHz / 24 bit, if it is massively compressed, limited, over-equalized, and poorly mixed, it will still sound like crap. Think Radiohead, those recordings are terrible regardless of the format.
But, a clean, natural recording with minimal processing captured well with great microphones and great care on the engineers' part, well, that can be amazing.