In other words, if a baker keeps baking better-tasting bread, and a piano maker keeps making better-sounding pianos, the economy will grow.
This is true, but only to a point. Market saturation also plays a role, plus the theoretical and practical limits to quality in both of those cases. Costs do not scale linearly with quality increases. There is a limit to the quality differences people can differentiate, so at some point people will stop paying for better bread and pianos because a) they better versions are too expensive, and/or b) they can't tell the difference between that and what they already have.
How many people do you know who wish they had a piano but they can't find one that's of high enough quality?
I have no doubt that years of experience can lead to a superior instrument, but the market for such a device is limited to the few musicians who are able to play at a superior level. you can also see this closer to our home in the commodification of computer hardware; the resolution ability audio technology (as used in soundcards) passed beyond the threshold of human hearing ability some time ago, so competition has shifted towards features, design and branding.
I do agree with the article's suggestion that economics should adjust to the idea of energy as the fundamental quantum of value, but given the general public's poor understanding of economics it might be argued that there's insufficient demand to drive such innovation in the shot term.
This is true, but only to a point. Market saturation also plays a role, plus the theoretical and practical limits to quality in both of those cases. Costs do not scale linearly with quality increases. There is a limit to the quality differences people can differentiate, so at some point people will stop paying for better bread and pianos because a) they better versions are too expensive, and/or b) they can't tell the difference between that and what they already have.
How many people do you know who wish they had a piano but they can't find one that's of high enough quality?