Reading further, the argument isn't what I expected. It's just 2 steps:

1. Language doesn't correspond to reality.
2. Therefore, whatever meaning we find in language comes from God.

This is presented on pages 93-120. For point 1 he cites Wittgenstein, and for point 2 he cites Derrida, who wrote much later. He may be abusing Derrida, though it's hard to say what either Derrida or Steiner means by "God".

I think I understand how Steiner thinks now. He really means it when he says words are a game that doesn't correspond to reality. He doesn't argue points because he doesn't believe his statements have a truth-value corresponding to reality. Advancing a new thesis, to him, is exactly like writing a new novel that references previous novels. You don't have to ask whether the previous novels were true. You are just taking what they said as the next step in the game. That's why to him, a citation counts the same as a proof, and why he never questions whether the sources he cite are correct or contradict each other. It is enough for him that someone has said it; it is now part of the game.