The argument isn't that Bitcoin is virtual, rather that it doesn't LEGALLY have a value of the type (monetary/financial) necessary for it be a valid consideration offered by contract for that contract to be considered a security.  Securities have to offer a specific type of consideration - and the core of the argument is that they don't meet that definition.  It increasingly looks like the US authorities are now intent on changing their mind on that - which luckily isn't of too much relevance to those of us in other countries where a different view is taken.

I agree with a lot of the article - but by no means all of it.  Specifically I disagree that contracts where payment is in BTC are contracts without consideration (and hence null and void and unenforcable).  Whilst it's necessary for consideration to be offered to form a contract, such consideration doesn't need to have a monetary value - valid consideration can exist at any time where the parties agree that what is being exchanged has value (that's a gross over-simplification).  Further, for something to be consideration it is only requisite that it must move from the Promisee - it doesn't have to move to the Promisor.  So unless the parties are able to obtain BTC for free (meaning no cost in money OR expenditure of effort) there is a cost to them in fulfilling their part of the contract - that what they then provide (BTC) may have no recognisable (monetary) value doesn't invalidate it as a consideration.  Put another way - receipt of any measurable benefit is NOT a pre-requisite for something to be a consideration : it is sufficient for there to be a cost (not necessarily a financial one) in fulfilling the promise.  In short, the article conflated 'monetary consideration' with 'consideration'.

That line of thought is akin to the "it's all just pretend" theory adopted by BTC-TC and (aside from being wrong) isn't particularly helpful as it's a charter for scammers : by attempting to pretend that a promise to supply someone with BTC is not a consideration.

It may help to consider a simple contract here.  

Consider a scenario where the issuer sells shares for 1 BTC then promises to spend $10 each month on buying BTC and send them to you.

IF BTC are not considered money or currency in your jurisdiction then there is no exchange of monetary value - as neither the 1 BTC you send to the issuer or the smaller amounts of BTC you receive back each month have recognised monetary value.  That it costs the issuer $10 to BUY the BTC he sends you is not relevant - as legally that value vanishes when he purchases the BTC (i.e. before any transmission to you).  You're only promised to be sent BTC - not that they'll be worth $10 (or anything at all) to you.  The article argues that in US law BTC don't meet the criteria for having monetary value (being money) - which unfortunately isn't relevant if the US decide to change the way they interpret things, but is still a valid argument in other jurisdictions.

Where I disagree with the article is over its apparent assertion that there is no consideration in such a contract.  As the purchaser I only need to demonstrate that it cost me time and/or money to purchase the 1 BTC I sent for it to plainly be consideraton.  And the issuer very clearly is offering consideration - as he is committed to spending $10 (regardless of whether or not the BTC are worth anything to me when I receive them).  So at the point at which I send the 1 BTC a bilateral contract is formed.  The same applies if the calculation of payments didn't mention USD - I only put that in to try to also address the issue of how a contract that mentioned USD could still arguably not be a security (subject to the relevant jurisdiction treating BTC as having no monetary value).