To take it a bit further, the discussion imho is focused not to pizza and not to affiliates only.
Its directed to anyone selling widgets online, but instead of building one national brand (amazon), they have the blue-widgets.widgieRus.com / red-widgets.widgieRus.com / green-widgets.widgieRus.com
I think the points made in that interview (which are not new) talk about how to do it and what is the right way to go. Mr Cutts is not Ben Bernanke the fed chairman who's every notion means a lot for day traders. He's also not everything behind the G search results, which is not following the rules their official advice set furth.
In that interview someone commented complaining about these type of localized sites showing up in the top G serps although they did NOT "make unique content for each location page" as netmeg suggested above.