Sorry if I missed this in the whitepaper. But you cant be scaling well if everyone is monitoring every transaction. Necessarily. That is the problem that needs to be addressed for any decentralized ledger system to scale truly well. So the problem here is that what if someone sends you iota and you dont happen to witness that transaction. Does the sender personally send you a reference to the transaction?
You need to see transactions related to you and to your neighbors in an economic cluster. In Iota you don't need to monitor every transaction though.
And what of transactions out side of your "economic cluster"? Or is that just shorthand for saying: Within this cluster of nodes, even though each of us is only watching a fraction of the network, we are collectively watching the entire network and will inform each other if we see anything relevant to other nodes.