Which means what, exactly? It's magical thinking to point out that our current civilization exists and is available to any AI we might make?

I can't speak for XiXiDu, but I myself have noticed a bit of magical thinking that is sometimes employed by proponents of AGI/FAI. It goes something like this (exaggerated for effect):

1). It's possible to create an AI that would recursively make itself smarter
2). Therefore the AI would make itself very nearly infinitely smart
3). The AI would then use its intelligence to acquire godlike powers

As I see it, though, #2 does not necessarily follow from #1, unless one makes an implicit assumption that Moore's Law (or something like it) is a universal and unstoppable law of nature (like the speed of light or something). And #3 does not follow from #2, for reasons that XiXiDu articulated -- even if we assume that godlike powers can exist at all, which I personally doubt.

If you took the ten smartest scientists alive in the world today, and transported them to Ancient Rome, they wouldn't be able to build an iPhone from scratch no matter how smart they were. In addition, assuming that what we know of science today is more or less correct, we could predict with a high degree of certainty that no future scientist, no matter how superhumanly smart, would be able to build a perpetual motion device.

Edited to add: I was in the process of outlining a discussion post on this very subject, but then XiXiDu scooped me. Bah, I say !