I don't understand why this reasoning is inappropriate for the application (HPC). If they were suggesting this as a way to develop massive enterprise applications with vast compatibility requirements and rapid application development needs that would be one thing, but for specialized supercomputing applications do you disagree with this approach?
Modern compilers are generally considered smart enough to do a better job at optimizing your code than you. Maybe if you're really, really smart you can do a better job than the compiler. But I suspect most people who say this are not, in fact, smarter than the compiler (but are simply suffering from self-serving bias). And by saying it, they're fooling a bunch more people into thinking that modern compilers are stupid, leading them into incorrect decisions like actually writing applications in assembly "for performance reasons".
So while yes, there are probably a small number of cases where it's still worthwhile to write stuff in assembly, it's not worthwhile to talk about it as though it's a good thing (I would guess you should only do it when it becomes a necessity, and complain about it a lot, rather than presenting it as a feature)
Compilers are great at some things and really bad at other things. The C and Fortran ABIs are too permissive in some cases, making certain optimizations impossible for the compiler to do (without combinatorial growth in generated code size). On x86-64, you can go a long way using SSE intrinsics, but that is pretty close to the assembly level. IBM did a bad job designing the PowerPC intrinsics, so they are nearly useless. There are a few computational kernels that I have sped up by a factor of two relative to what the compiler could produce or the best published result. The x264 project writes a huge amount of assembly and provides consistently better performance than other implementations. There is still a place for assembly, although it should be kept localized.
Take a piece of assembly code generated by a compiler and try to optimize it. You'll see that you don't actually need to be that smart to obtain a significant perf improvement.
Compilers are good, but they must ensure correctness for any source code. On the other hand, you now exactly what you need thus you can drastically simplify / optimize the assembly code.
As someone who writes assembly, I think this is overstating the case. There are a lot of algorithms (particularly short ones) where good C compilers generate nearly optimal code that you would be hard-pressed to improve on.
In my experience the benefit you get from writing assembly comes largely from your ability to do better register allocation for your fast-paths, in cases where your compiler would spill registers to the stack.
I don't think they are saying that you and I (application developers) should be writing assembly (they mention C/C++, and refer to C++ libraries elsewhere), unless we want to.
What they do emphasize is that the operating system was written in assembly, and while I don't know the members of the team personally, I'd guess anyone who has completed a project such as this (with this level of polish and utility) is at least potentially capable of being smarter than your average compiler.
I'd also like to state that I do agree, for a vast amount of software development, the convenience of higher-level languages and API's outweigh the associated performance disadvantages but for some programs, the ones that talk directly to hardware and who's library functions are called billions of times a second by application programs (and let's add, that are written far less frequently than application-level code) the assembly approach is justified.
Of course you're welcome to build something similar in a compiled language and prove us all wrong :)
I'd also like to say that while you may not enjoy programming in assembly that doesn't make it a bad thing.
Programming assembly is actually fun (for some of us) and gives you a level of intimacy and insight into the machine that no other language can provide.
Great! Go right ahead and program everything you want in assembly. If it's for fun, or for educational purposes, or whatever, awesome. But don't go around saying it's going to perform better than Haskell code, or whatever higher-level language you want, that produces the same output, without testing it.
