Well, I do not know whether he did, but I am ignoring most of the discussion on this thread. An external will not provide any protection for fire, earthquake and even theft protection is iffy. Electrical surge maybe, but that same surge will likely get through the external power brick as well. The real "ideal" solution of off-site backup through carrying around the external everyday or network backup are just not practical for consumers. The upload speed is limited with DSL and cable. Besides, these are the solutions that exist already and consumers just do not backup regularly.
Time Machine is for protection against simple harddrive failure and accidental file deletion. An additional internal would be perfectly acceptable for these purposes. Considering the all-in-one iMacs are purchased for their simplicity, not having to wire up another external harddrive would be very valuable. Otherwise, it would still be an uphill battle to get consumers to actually utilize Time Machine.