I think the thing to take home from this, even if you are a gamer who likes isometric play, is that designers really need to think about how to handle camera movement and the UI for an isometric game even more carefully than, perhaps, for other game perspectives. I've played isometric games that are intuitive and makes the best use of its format (such as, as Yahtzee notes, games requiring some field tactics), and I've played ones where movement and such feels frustrating or clunky. As a matter of fact, Bastion was one of the latter for me -- I am a PC gamer and don't have a controller for my games (most of the kind of games I prefer tend to play well if not preferably with mouse and keyboard), and the keyboard/mouse commands in Bastion really felt awkward. Yes, it was set on the diagonal and you almost always had to be pressing two movement keys at any one time to move effectively, and playing after awhile made my hands hurt (which is part of why I've never finished the game, even though it is a lovely game with a compelling story). There's other annoying factors in isometric games surely.... especially when indeed they weren't built on 3D engines and you couldn't zoom in or out or rotate the camera (a "feature" some indies recreate in the name of nostalgia). I recall several moments in Baldur's Gate 2 where I couldn't loot bodies (including my own PCs if they'd died) because they'd fallen behind a piece of scenery.
I do like isometric play and it doesn't affect my immersion -- rather, I don't need to picture "myself" in the game world, I am just as absorbed watching a story from a distance (like watching TV, but interactive, which is what for me makes it immersive and engaging). And that's a lucky thing for me--because first person perspective unfortunately makes me physically ill, a condition/situation that is getting worse as I get older. (And before someone asks, altering FOV can sometimes mitigate but does not eliminate the problem.) And some games would not do well to be over-shoulder camera--I like playing party/unit-based games and I do think isometric format can often work best or at least very effectively (which again, I know he acknowledges). I don't need everyone else to like isometric play and Yahtzee states good reasons for why he doesn't do it for him--I'm just glad there's a variety of POVs out there for a variety of gamers to enjoy.