The real-world analogues of the devices he's interacting with do just work with minimal thinking, and this is what the letter index mimics. In an indexed book, you find the letter and quickly flip open the book to the proper page. In an indexed scrolling list, you touch it and scroll directly to that letter (or magnifying glass). I really don't intend to 'blame the user,' but I'd respect the 'user' at least a little bit more if the user would explore the software. The options are very clearly laid out, in the user's language (especially wherein a user can use said language to write such an in-depth rant!), and they are discoverable with even the most casual searching.
Touching the screen isn't going to get your fingers sawed off or anything. It's there to be touched, and destructive actions are insulated from touch. A little exploration goes more than a long way.
Sure, for this guy, who is supposedly a tech guy. But if we consider the 'mass market' we're at the point where we have millions of 'dumb' smartphone users. The people who are used to feature phones are migrating to smartphones, and it's this 'mass' demographic that usability issues need to address.
Touching the screen isn't going to get your fingers sawed off or anything. It's there to be touched, and destructive actions are insulated from touch. A little exploration goes more than a long way.