When I read the title I interpreted it as "economic bubble", and even skimmed the table in the article and tried to make sense of it. Until I realized the bubble refers to the idiom "living in a bubble" as in shielded from outside influences. I think it's a perfectly good term to use for the argument, even if the word 'bubble' has been overshadowed by recent economic troubles.
The word is correctly used but if someone wants to communicate well they have to take into account the likely interpretation of a term regardless of whether that interpretation is correct.
I really wish that, on inventing a term relating to startups, the author hadn't chosen a word which already means something in relation to startups. When I think of bubbles and startups, I think about coming stock market crashes. I think the word the author was looking for was 'cocoon', or 'womb', or some other such synonym that doesn't imply an impending pop.
While I think that this is usually the right strategy for most people, I can't help but think of Apple's products, which are developed in the bubbliest bubble of all.
From what I've read, and heard, Apple has it's very own prick who will do whatever it takes to burst it's own bubble. That this process happens behind closed doors doesn't make it any less painful for the designers whose ideas get shot down on a regular basis.
But, unless you're a borderline sociopath with excellent taste who's also managed to recruit and inspire great product teams, you're better off showing your product to people who don't care what you think.
The speed of iteration is much more limited when designing hardware. I think this is why the best bubble wins in hardware design but escaping the bubble is better in software design.