"Mostly I'm involved in mobile, wireless, and systems, and in all three of these subfields I see plenty of academic work that tries to solve problems relevant to industry, but often gets it badly wrong."
If you want to work on problems irrelevant to industry, go nuts.
If you want to work on problems relevant to the industry, it helps to double-check that your problems are relevant to the industry.
The desire to work on problems relevant to industry is coming from academia, not the author.
Since he doesn't really give specifics, it's hard to tell, but I wouldn't necessarily read most academic papers that mention applications (especially "potential" applications) as having an actual desire to work on short-term industry-relevant problems. Yes, papers often have a vague gesture towards, "breakthroughs in [graph algorithm X] have potential uses in [networking problem]", but this doesn't necessarily indicate a deep desire to work on problems relevant to industry. Rather, it more often indicates a deep desire to work on graph algorithms, and external pressure to throw in a mention about potential applications in some hot area. So I wouldn't read too much into it.
Indeed! The question is: are we ready to drop the requirement of listing applications everywhere?
The department where I am studying is big on graph theory and other theoretical CS concepts, and I always feel a bit uneasy when we write or read about applications (on a grant proposal or in a conference paper, usually) and yet none of the authors really cares about applications. They usually care because "it was an interesting problem that some people studied in the past and we can do it better than them".
Yet, as far as I know, nobody can really write that sentence unless it is such a fundamental problem that its usefulness or importance goes without saying. So we are now in a situation where everyone (theoretical CS, applied theoretical CS, and practical CS) pretends their work have actual applications, and I feel Matt is calling them out on it.
If you want to work on problems irrelevant to industry, go nuts.
If you want to work on problems relevant to the industry, it helps to double-check that your problems are relevant to the industry.
The desire to work on problems relevant to industry is coming from academia, not the author.