For clarity, when I talk about "grammar" here I'm talking about what Wikipedia calls "orthography", which is what I think the OP was talking about. You're right that #1 is a style correction and #3 is a typographic correction--on the other hand #2 is unambiguously orthogaphic[0], even if it's not as well known as it's/its, and if the writer feels justified in making up "itses" to mean "it's and its", presumably because people can infer what it means from context, that puts them in a very shaky position as a prescriptivist.
The interesting point that I'm trying to make isn't that that author is wrong or right, because I don't really care much about slips in orthography. It's that once you take a prescriptivist stance you're either making an appeal to popularity or you're entering an arse-kicking contest with a seven-legged monster with no arse.
> once you take a prescriptivist stance you're either making an appeal to popularity or you're entering an arse-kicking contest with a seven-legged monster with no arse.
That's an extreme and unjustified dichotomy. The article is written in an informal linguistic register, not in the voice of a 19th century naturalist writing for the Royal Society. (Is my use of the passive voice in the previous sentence also "incorrect" because style guides frown upon it?)
Still, the article's language is clear, precise, and suggests that the author takes pains to accurately communicate his thoughts. We haven't seen the author's grammar test. I would suspect that it tests the kind of linguistic economy I'm talking about, not whether the test-taker has memorized obscure passages from Strunk and White. As such, the test is probably effective at eliminating candidates who don't give a damn about correctness.
The interesting point that I'm trying to make isn't that that author is wrong or right, because I don't really care much about slips in orthography. It's that once you take a prescriptivist stance you're either making an appeal to popularity or you're entering an arse-kicking contest with a seven-legged monster with no arse.
[0] http://en.wikipedia.org/wiki/English_compound#Hyphenated_com...