I can understand why storing state on the DOM would quickly start to suck if you're building a single-page application, but I've found it works really well for applications that work without JavaScript using progressive enhancement.
True, what I'm talking about in my post is definitely a different paradigm than a more traditional web site where one of the goals is to make it widely accessible for any and all users/devices.
We're in agreement there -- the DOM is a nice place (technically the only place) to store state for light JS enhancement of web sites, but I think we're going to see a larger gap grow between those and web apps.