Basic summary that I can tell from that article is that NVidia choose a very different way of doing shaders compaired to ATI, and since the R300 is what DX9 was designed around, ATI sees the benefit of having better peformance with the native DX9 shader uses.
Not knowing what actually goes on during DX development, I'd just like to comment that this definitly seems like the typical MS game of setting standards. While OpenGL seems more like open source, and either company throws in what they want into the mix until a standard is decided on.