There are pretty good explanations in the comments, but I'll add my two cents.
"What is different about that from a points/rewards system?"
SMTs are a complete different thing from just points that businesses give: they are mini-Steems that can be assigned with similar attributes as Steem: the ability to stake tokens and earn more tokens with it. We already see with SCOT tribes how powerful this system can be to build communities, so I'm sure there are many creative ways businesses can utilize it.
He asked a ton of other questions about SMT'S and basically said that he does not understand the draw as places already can offer their base a rewards through points or other programs as millions of places already do.
When people start to slowly adopt SMTs and realize that most of the points you never get to use, because you need a certain amount to do anything with them, they are hard to accumulate, they often lack interoperability between other businesses etc., people simply won't use them anymore when there is an option to earn something that can be actually used to exchange for money or to earn even more via staking function – some business could give some kind of benefits for customers for staking their coins, for example.
He was appalled at the fact that creating an account through Steemit.com can take upwards to a week or more.
The account usability is a bit complicated, true. However, there should be a solution coming to that with lite accounts (in HF23?) that let people interact with the ecosystem in an instant with proxy wallet accounts, and later they can take full ownership of their account if they wish.