When they say "you can't separate" the two, that's absolutely not in reference to sidechains or other similar schemes.
In this paper, we argue that it is possible to simultaneously achieve these seemingly contradictory goals. The core observation is that
Bitcoin the blockchain is conceptually independent from bitcoin the asset
I totally believe that BlockStream's business as it standards will depend on that fact.
There is a risk of destroying Bitcoin as we know it if BlockStream's goal is achieved.