His points are valid, but he misses what I consider are two key factors.
1) The importance of cognitive dissonance. It is astounding how resistant people are, and what lengths they will go to, in order to avoid the unpleasant realization that they were fundamentally wrong about something. This ensures that we will have a very long period where people are simply incapable of learning from mistakes. On the plus side, it does mean you can sneak some positive reforms through by disguising them, and can create the policy equivalent of a perception distortion field.
2) The influence of money. Intellectual rigor in policy and in academia did not simply wither, it was actively assaulted and destroyed. Numerous industries and individuals financed a large number of assaults from numerous directions, all driven to results oriented conclusions. That the vast majority of these assaults shared a single, useful intellectual framework helped to re-enforce the overall effectiveness of the corruption of the field.