That's because the passage isn't actually about TDT; Eliezer is trying to avoid throwing anachronisms into a story set in the 1990s. It's instead about the closest thing that existed at the time, Hofstadter's idea of superrationality, which does (IMO) suffer from the flaw you posit.
Update: This post has also been superseded - new comments belong in the latest thread.
The second thread has now also exceeded 500 comments, so after 42 chapters of MoR it's time for a new thread.
From the first thread: