I watched his video and enjoyed it, but I have to agree with Grunker's points as well.
Shandification, as MrBtongue is using it, seems to imply not so much non-linear narrative as it does a narrative that is free from typical conventions of authoriship. When telling a story, we usually think in terms of A->B->C->D; that is, events which take place one after another and in sequence to create a dramatic arc that we relate to and (hopefully) enjoy. He said as much in the video. Shandification, as he is using it, doesn't refer to the fact that the story doesn't take place one scene to the next, in an intended order, but rather that the audience is responsible for creating a story themselves out of disparate elements, based on the context in which they are experienced. In other words the authorship of the author is diminished because his/her role is less about telling a story and more about enabling the audience to create its own.
This is why Grunker bringing up gameplay mechanics, such as choice & consequence, is important. While New Vegas and Fallout 3 are equally non-linear, New Vegas does a much better job not so much because of the consistency of the setting itself, but because the consistency of the setting is reflected in the player's actions, and the setting remains consistent with what the player does within it.
Here's another way of demonstrating the difference: Grand Theft Auto IV is a non-linear game, outside of the story missions. You can go anywhere and do nearly anything you want. The setting is also exceptionally well-realized: you have multiple TV channels with literally hours of programming, radio stations with even more hours of music and talk programs, and let's not forget that there is even a simulated version of the goddamn Internet. The way people in the street behave, the way cars look and drive, and those story missions have a great cast of entertaining characters - this all speaks to our understanding of a modern American urban center, so much so I would argue GTA IV has by far the most well-realized contemporary city setting of any videogame.
But, the world itself doesn't change based on what you do. Cause a massive car crash in a location? Drive away and come back after a few minutes, and it's like you were never there. Shoot up a shopping center? You won't hear about it on TV or radio. Base jump off a skyscraper? Nobody in the world will take notice. Grand Theft Auto has gameplay systems that allow for incredible freedom, but it does not have mechanics which are able to tie setting and story to those other systems; as a result the world feels shallow and the impact of your actions is lessened. Whether this makes for a better or worse game, of course, depends on what the goals of the developer are as well as the demands of the audience.
The point about "what do they eat" at the end is a good one, but it's misplaced. While it does highlight the consistency of the setting rather well, and it fits into the non-linear reactive narrative the player will be experiencing throughout the game, as it's not really a character, event or indeed story in and of itself, it is not a very good example for proving his argument - even though I think his argument is a sound one. This is a topic that demands much more detailed discussion than he was able to provide.
