For the inscriptions to be either true or false, they would have to correlate with the contents of the boxes. If he didn't assume this correlation existed, why would he have bothered trying to solve the implied riddle, and then believe upon solving it that he could choose the correct box?
The assumption that one of the inscriptions is true is also the assumption that the contents of the boxes correlate with the truthfulness of the inscriptions. And the key point is that neither inscription need be true, because the contents of the boxes don't correlate with the truthfulness of the inscriptions. And in fact, neither inscription was true.
In other words, I don't understand why you're arguing a simple clarification of essentially the same point you made.
He assumed something that implied the correlation, but he did not assume the correlation. He also assumed something that implied that the key was in the second box, but if he assumed that the key was in the second box, he wouldn't have even bothered reading the inscriptions.
Once upon a time, there was a court jester who dabbled in logic.
The jester presented the king with two boxes. Upon the first box was inscribed:
On the second box was inscribed:
And the jester said to the king: "One box contains an angry frog, the other box gold; and one, and only one, of the inscriptions is true."
The king opened the wrong box, and was savaged by an angry frog.
"You see," the jester said, "let us hypothesize that the first inscription is the true one. Then suppose the first box contains gold. Then the other box would have an angry frog, while the box with a true inscription would contain gold, which would make the second statement true as well. Now hypothesize that the first inscription is false, and that the first box contains gold. Then the second inscription would be—"
The king ordered the jester thrown in the dungeons.
A day later, the jester was brought before the king in chains, and shown two boxes.
"One box contains a key," said the king, "to unlock your chains; and if you find the key you are free. But the other box contains a dagger for your heart, if you fail."
And the first box was inscribed:
And the second box was inscribed:
The jester reasoned thusly: "Suppose the first inscription is true. Then the second inscription must also be true. Now suppose the first inscription is false. Then again the second inscription must be true. So the second box must contain the key, if the first inscription is true, and also if the first inscription is false. Therefore, the second box must logically contain the key."
The jester opened the second box, and found a dagger.
"How?!" cried the jester in horror, as he was dragged away. "It's logically impossible!"
"It is entirely possible," replied the king. "I merely wrote those inscriptions on two boxes, and then I put the dagger in the second one."
(Adapted from Raymond Smullyan.)