That's a load of crap. Let's run down the problems:
Having a lower and upper cap is not good - artificial cut-offs and truncations disturb things, no question.
The rest of the first blob is fine, except: "The system is conservative with its calculations, so that is reasonably sure you deserve the rating before it awards it to you. In other words, your rating may be low when you haven't played many games and rise as the system gains more confidence that you deserve the higher rating."
Now, being conservative is fine (well, conservative is a relative term, but whatever, being more conservative than, say expectations, is fine and probably good). BUT being conservative does NOT mean giving you a lower rating when it's less sure, it means giving you a bigger range to both top and bottom. Every argument you can make about the top you can also make about the bottom. Of course, it's possible to have an underlying assymetric curve which will lead to differences - however, there is absolutely NO substantive evidence to support this, and the amount of groundbreaking research needed to put such a curve on good fitting would be incredibly irresponsible for them to have done.
But ok, this is mostly a gimmick to get you to play more, and to continue to encourage you as you go on, as the overall trend of the ratings is upwards. And well, it's not an uncommon gimmick, so I will try not to complain too much about it, even though it drives me nuts.
However, it's the second bit that is particularly... let's just say wrong.
"The purpose of a rating system is to estimate your skill so it can be used predictively, not to make you feel good about winning." This is actually fine, though I actually doubt that it's true. But if you want to be able to use the thing predictively, then why do you not allow people to, you know, predict anything with it? Like, have some way to convert rating differences into expected win percentage? Or at the very least, show going into a matchup what the system thinks the win% is. Because if you don't make predictions, you aren't being predictive.
So saying that the ratings aren't supposed to make you feel good is a true if not-very-good-for-PR statement. But support it!
"Suppose you have played one game, losing to a 6000 player."
Ok.
"The rating system has to assign you some rating arbitrarily lower than 6000,"
This is absolutely false. The system doesn't have to give you a rating at all, particularly in this situation. Indeed, an entirely reasonable - and in some cases used - approach is to not assign a rating at all until (at least) the winning percentage of a player is neither 0 nor 1.
"say it picks 5000. Now suppose in your second game you beat a player who has a rating of 2000. Your overall data is:
* loss vs. 6000
* win vs. 2000"
Actually, this isn't true. Or rather, it isn't thorough. At the very least, our overall data contains not only these things, but that the win vs. a 2000 came AFTER the loss vs. the 6000.
"From that limited data, a logical guess for your rating would be right in the middle: 4000." I guess you could say that that is "a logical guess", but in reality, it's a bad guess. This treats all data as if it happened simultaneously, which throws out the highly important recency information. Actually it's hard to know what we know without knowing what 1000 points mean. But if we look at it in a very very clear way, we can see that this is wonky. So after one game, we have some (vague) idea of what X's rating is, and we've (perhaps questionably) said that our best guess is 5000. Now this guy wins against a 2000. And our estimation of his skill goes down? This is telling me that his previous sum total of results (a loss against a 6000) is better than his current result (a win against a 2000).
What he is saying here is that it's better to lose against a 6000 than to win against a 2000.
Actually, if we look at it more closely, it seems that he's suggesting that winning against someone is a result that will always pull you towards their rating +1000 points, and a loss will always pull you toward their rating -1000 points. However, it doesn't take much thought to realize that this is one of the stupidest ideas for a rating system you've ever heard of, particularly when they allow ranges of values which are 10,000 points wide - and that a 2000 point spread here effectively represents at least 100% win rate. Actually, it's worse than that, really. Because if this is the case, then imagine you have a player who is rated 3000 and another rated 5000. If the second guy plays the first, his rating *necessarily* decreases, and the other guys *necessarily* increases. That is, your expectation is that the 5000 needs to win something like 200% of the time to *maintain* his current rating, and the other guy needs to win something like -100% of the time to maintain his. This is a linear curve, and it appalls me how bad of an idea it is.
"That's all mathematically fine," Actually, it rather clearly is NOT.
"but to the player, all he sees is that he just lost 1000 points (from 5000 to 4000) by winning."
And to the system, this guy just achieved the best result possible given his situation, and it now estimates him to be a worse player for it. Indeed, if this is the system, no one ever has incentive to play anyone worse than 1000 points below them, ratings-wise, as they can't even tread water. And the system thinks that by agreeing to the game, you're a worse player.
"This is an extreme example and very simplified compared to what actually happens, "
Ok...
"but it illustrates the principle, which is a feature of most rating systems. "
This is total B******t. Most rating systems aren't nearly this bad. Please, provide any evidence for this. (Now of course, I am sure there are systems out there which have this supposed feature, but the VAST MAJORITY of them do not).
"That said, we no longer allow you to lose points by winning. Instead, we're perverting the rating system a little to prevent this, only because it upsets players who have a hard time believing it's the best thing to happen in order to model their ability. "
Okay, now you're just contradicting yourself. You said that the point of the rating system is to have predictive power and not to make you feel good about yourself. Now you're saying that you're changing your system because people are upset? Which is it? Because you're actually doubly wrong here. This is not a perversion of the rating system (well, it probably is in some sense, i.e. it's less true to the system's terrible foundations, but not in the sense of making the system better/worse in terms of predictions), and it is moreover not following in what you supposedly are upholding as your principles.
" >Can't you just give us the exact formula you use?"
Now actually, I don't have a problem with not giving the exact formula. In the ideal world, you would have it. But there are a number of legitimate reasons for not giving it, so that's fine.
"Sorry, it's too complicated a system to plop into a formula, otherwise we would."
But this is again total baloney. I mean, go look at some of the rating systems that are out there. Go look at Glicko-boost or something. You're telling me it's *more complicated* than that? What 'geniuses' do you have who came up with such an elaborate formula, and how can you afford to pay them? I can't even fathom something that can qualify as a rating system which spits out NUMBERS and is supposed to be numerically predictive and CAN'T be plopped into a formula. Would it be a complicated formula? Yes, of course. Could someone else figure it out? Are you seriously trying to tell me that you're arrogant enough to think that nobody ever could work it out? No, you have other reasons for this, and it gets my craw that you give this "it's too complicated to put in a formula" nonsense rather than actually just giving your real reasons, which may well be legit, but which because you won't give them to us, start to look less so.
"But you shouldn't stress out over ratings or their calculation. It's better to understand the above principles if you're curious, use ratings as an aid to matching up opponents, and then just go out and enjoy playing the game!"
Now I'm fine with a "ratings don't matter that much" standpoint. But now you are telling me what I should stress out over and what I should enjoy?