The difference is that valve's software has to have a build installed on the client's computer or worse, a disk you shove into a console.
On the web, your releases update 100% of your client base instantly.
Though I do agree that depending on your market, "release early and often" can hurt you. Getting a bad reputation early can be hard to shrug off later.
It's not just the medium. A game with plot and direction won't be the same when replayed. Imagine someone trying to repeat a joke to make it sound funnier, when you've already heard the punch line. So, danger of over-generalisation, but certainly games like TF2 can be improved with updates, extensions rather than revisions.
Perhaps that's his point about bugs vs new features. Releasing often works when you are adding more good bits, not so much when fixing broken bits that should never have been released in the first place.
On the web, your releases update 100% of your client base instantly.
Though I do agree that depending on your market, "release early and often" can hurt you. Getting a bad reputation early can be hard to shrug off later.