Well, I really don't click with any of what is said in this article. Humans, for as long as we have existed on this planet, have told stories, in a basically linear way, with heavy authoring. There are experiments along the way, theatre that breaks the fourth wall as is mentioned, improv, some performance artists, etc. Yet, storytelling hasn't changed all that much because there are some type of learning and cognitive functions that are really hardwired into our brains. Technology does place us in a very different place than cavemen, but I don't think we've changed that much to forgo internal storytelling in our mediums. Not yet. I'm not saying it will never happen. I just think it's way too soon to be declaring this type of communication dead.
Also, I think that there are games that have taken the language of the medium and told an internal story much better that what has been mentioned so far. I point to all the "artsy" games as evidence that multiplayer does not equal the only way for games to draw the player into a interactive narrative.
Exhibit A: Shadow of the Colossus. Strictly single player. Mute. It uses ample interactive exploration and time spent travelling, loneliness, and some very visceral gaming at the colossi to tell a rather simple, yet strangely epic story. Very similar to myths of old that can be found in a lot literature in all the ages. It makes the player feel a lot of things, even a bond to a digital animal, stronger than any multiplyer experience I have had. I would say it really takes advantege of the "language" available in a game.
Exhibit B: Flower. I think this type of games are in its infancy, but it completely embraces the fact that it's an interactive medium (the literal physical input) to guide the player through the game and convey a message. OK, so a lot of people say there's hardly any game or narrative in there at all, and I can understand that. Good narratives can be subtle too. Plus, I think demostrated that there are still words to add to our the gaming language with which we want to approach interactive narrative.
So far: rather shallow stories, no extremely complex characters, right? I'll concede that. I just think this type of games show that there are still a lof of avenues to take before we declare that external storytelling it the one and only way. I have one more thing to say:
exhibit c: Jordan Mechner's little absolute masterpiece, The Last Express. Single player experience. Pioneered the rewind function that would later be at the core of the Sands of Time trilogy. It's a game you can play many times and always experience it in a different way (dialogues you hadn't heard, alternate endings, different ways of solving a problem, etc). It is heavily scripted and authored, yet it weaves an extremely complex tale and develops multilayered characters (male and female) in a way that distances itself from book and film. If you've never played this game, it's my opinion you have no place talking about innovative narrative techniques in gaming. Plus I think it's one of those examples where style trumps graphics, as the art used is still unique and doesn't look all that aged.
EDIT: Just to add a final thought. What I feel these (and other games) share is that in all of them the gameplay actions you take are the story, and not that the actions you take in the game are way to get to or progress a somewhat removed story. That is what storytelling in game should be.