I do agree with your point that this isn't literate programming. The org-babel homepage has more references to use cases which would be considered actual literate programming, and are quite interesting if you are interested in the topic. This post is more of an attempt to show how you can organize your .emacs file into manageable pieces in org-mode, rather than an attempt at literate programming.
You can also use github repositories to actually serve up your blog if you use jekyll! I run my blog using this setup + github and it works pretty well.
I think the reasoning in the experiment is a little flawed. Given that each task is so small, the cost of a context switch in the example is significant.
Most people multi-task because they are waiting for the first task to finish/ get rid of the monotony of doing the same thing over and over again etc. in which case multi-tasking can significantly improve output. Its kind of like the OS running multiple processes on a single core. If you are waiting for something, you don't need to hold up everything else..
Yep - mostly followed that I think. Once you set up a basic blog, then you can keep tweaking things over time. Get a simple version up and running and then tweak as per your liking.
The nice thing about spending the time setting it up is that once it's all done it is really quick to publish. All you do is create your post in org mode, Alt-x org-publish and then git push, and your post is live! I tried posterous before this, but getting all the syntax highlighting/formatting right was just a pain. With emacs + git, everything flows smoothly. In my opinion, well worth the time it took to set things up.
A better approach is github(jekyll) + org-publish. I run my blog http://www.codeherb.com with it. Source at https://github.com/anisaraf/anisaraf.github.com . It can take some time to set up - depending on your emacs experience. Once set up, it is relatively painless to publish articles(it still doesn't mean that I blog as much as I would like to :P).