Creating shares, regardless of changes in company value, dilutes percentage ownership of previous investors. I think your definition of "dilution" isn't capturing this aspect of GP's comment.
Sure, it dilutes the percentage owned. But unless you have a down round, you have more value.
If someone has five shares at $1000 total valuation and 100 shares, they have an equity position worth $50 and 5%. If the company grows and issues another 100 shares but the price paid by an investor for those shares is $5000, that means that each share (ignoring preferred share premium, which is ok in the abstract but shouldn't be ignored in reality) is worth $50. The five share owner owns less of the company but what he or she owns is worth more ($250 vs $50, but 2.5% vs 5%).
