I disagree with some of the assumptions in that essay.

Suppose that I were to actually read a hundred sci fi novels in a couple years, what would happen? Speaking from experience (more with fantasy than sci fi,) it would cause me to become a lot pickier with respect to sci fi novels. I've gone from being rather undiscriminating to a point where I can only assign a single digit percentage likelihood that I'll enjoy any particular sci fi or fantasy book given the knowledge that it's won an award such as a Hugo or Nebula.

Now, from this, shouldn't we conclude that the market is already oversaturated? After all, if there are already so many works that they can drive my expected utility from reading another work in the genre so low, the last thing we need is more, isn't it?

Not really, because what a good author is actively trying to do is create works that will be interesting to audiences in light of existing expectations and literary influences. Tropes evolve, and a savvy writer is one who's prepared to account for a savvy audience. Writing isn't a commodities market, it's an arms race.

Of course, there are clearly reasons other than aesthetics driving the production of popular culture. Humans use shared culture such as media consumption for social bonding. It's much easier for people to bond by exchanging impressions of shared media consumption than unshared, so for socialization purposes individuals benefit by sorting their media consumption so that a significant proportion is shared with peer groups. One method is to sort by historical esteem, or "classics," and another is to sort by recency. Many societies throughout history have gotten by mainly using the former, but in a society with higher values of intellectual progressivism, it's probably inevitable that reverence of historical works will be a weaker motivator, and besides which, the more quickly culture changes the more strained the relevance of old classics will be.