I'm pretty sure that if you asked him, he'd tell you he's still a Trotskyist at heart.

I'm not sure what this means.

He still has high regard for Trotsky and the historical movement of socialism. (Here is evidence, dated 2005, and more, dated 2004.) So you can certainly hold that against him if you are so inclined.

I interpret his statement in Reason to mean that socialism (and so presumably Trotskyism) has outlived its utility. And not because the movement has died out (as I read it) but because society has progressed beyond anything that the ideology of socialism can address.

Edit: Added another reference.