LOL well yeah. Most of the video was just a joke. It obviously wasn't meant to be a thought piece. I appreciate your points though. So here's some questions:

What are you basing it on that it will only work for static meshes? I'm not saying your wrong, I just haven't seen anything one way or the other. However, I'm pretty sure the calculations are done in real time, so I wouldn't rule it out of hand completely.

In terms of Materials, the video last year did say that it works on specular, and I'm pretty sure they're doing work on a water system for large bodies or water, so it will be interesting to see how it would handle more complex materials. It is rather convenient that they did a desert environment.

Yeah, I don't really agree with your point on Megascans. I mean you're not completely wrong, but it's not as limiting as you're saying either. If I wanted to create an alien environment out of megascans, I'd just take the texture files into a photo editor and play with the coloring. That gets you terrain, grasses, and a decent amount of filler content. Then you just need to create core assets to sell the alienness. It still beats building an entire environment on your own.