Great question and looking forward to hearing what others think too.
I think it's both. Google knows they have the power and I do believe they used My Blog Guest as a scare tactic. Yes we all know guest blogging can be scammy and I am personally tired of all emails with the crappy submissions. But I think there was a better way to handle that whole situation. For example, IGNORE links instead of penalizing. Not everyone who guest posted submitted or hosted spammy content.
But back to your original question, I took the quote to mean more that SEO firms will be hurting simply because it's going to be harder for them to help their clients get traffic since so much of SEO is now dependent on that site's authentic popularity. An SEO firm can't help someone have genuine engagement unless they are going to manage their marketing campaign for them.
So even if they do still rank well, how many of them will stay in business unless they are UPFRONT about the fact that a client's traffic will LARGELY depend on what they do AFTER the basics like meta tags and sitemaps are covered. So if they are being honest about what they can and cannot do, there should be a place for SEO firms.
I don't think Google would take manual action on all SEO firms.... well then again.... nothing surprises me anymore so let me back up. LOL But I do think the firms will have a harder time keeping business because they cannot promise RESULTS like they could years ago. The results largely depend on the site owner's marketing.
So I don't know if they were talking about manual penalties or the sheer fact SEO as we used to know it is dying so it's a tough business to get into.
I often think about very reputable SEO firms like Seer Interactive -- owned by Wil Reynolds, a very well-respected guy in the SEO industry. I wonder how his company is handling all this.