Based solely on the economics involved if you costed all the developers' time properly and accounted for the costs in distribution for comment and the costs involved with duplication of effort and multiple directed efforts; then yes the overall cost of Linux would be higher than a normal commercial software development project of similar scope.
However, due to the reality of how Linux develops the final answer reached is wrong due to faulty assumptions that you have to produce one product and the lowest cost.
By having numerous developers each working on the project and then passing their work around for review by others you get a greater synergy going and a better final product as a normal software development project can not afford to hire so many developers of such quality. Also by allowing the developers to investigate and tryout multiple facits through the multiple direction of effort you get multiple answers that gives the end user more choice and thus appeal to more people via the different results.
The fault with the author lies in assigning tradition commercial corporate costing to something outside its costing envelope; the no charge efforts of the developers greatly reduces the final cost. Also the fact that the developers can follow their own minds creates scope for greater innovation.