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Jiro comments on What false beliefs have you held and why were you wrong? - Less Wrong Discussion
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Taking a quote from somewhere else as a reply always risks the possibility that it doesn't quite fit what it is being used as a reply to.
I was pointing out that the described competence level implies that a competent programmer must be in the top 0.5% of the candidates for the job, not the top 0.5% of all programmers in the world. Of course your quote is in reference to the latter, not the former, and is therefore off point. In fact, your quote says that the former is indeed true, but the latter should not be confused with it.
(Furthermore, the original FizzBuzz reference claims that only 1 out of 200 people can solve FizzBuzz as an interview question, not as something required with each resume. Only hiring 1 out of 200 candidates who submit resumes is a heck of a lot more plausible than only hiring 1 out of 200 candidates who get to the interview stage.)
The quote might not fit perfectly, but the insight does.
And the point of the quote is that this really doesn't say as much as you think. Hence why "99.5% of candidates fail the FizzBuzz test" isn't as implausible as on first glance.