The way I read it, the document hints towards users storing their own identity information off-chain using IPFS nodes or similar, and probably arbitrary data not being kept on-chain at all - but I agree it's far from clear.
It would take a huge development effort to move all the arbitrary Steem data off-chain, and update the existing front-ends. Would you want to pay to find out that there was an asteroid heading for earth and there was nothing we could do about it? That said, there seems to be some chance that the launch of SMTs could actually help pivot towards this kind of architecture if we wanted.