I haven't had a chance to read the article in question (hasn't hit on my side of the pond yet) so my comments are purely based on what I'm seeing claimed here and only discussing factual topics. Not taking sides.
By 1984 the arcades were full of games such as 1942' Paperboy and Pacland...
By late 1984 early '85. None of those games were even out when the 7800 was first announced and test marketed during the early summer of '84. 1942 was released in December 1984. Paperboy was by an entirely different Atari company (Atari Games), etc.
The 7800 launched with built in Asteroids a game from 1979!
No it didn't. That was later in the UK and it was the 7800 version of Asteroids from 1984. The console itself was launched with the original grouping of launch titles programmed by GCC.
The games were out of date in 1984 so who in 1986/7 wanted a system to play Centipede or Joust on?
Actually most of the titles in the original '84 launch lineup were still top earners in arcades, and games like Food Fight and Pole Position II were less than a year old (Pole Position II was released in arcades in December '83).
My point was not to say the 7800 was not a capable machine, but to say surely there were better games for the system to highlight than conversions of old arcade games. I know there are, I own some of them. You listed another 5 exclusives in your last post.
It seems the issue here is an unfamiliarity with the licensing market at the time (and again I have no idea how well the article did or did not get this across). When The 7800 was originally produced under Atari Inc. in 1984, that company had it's own arcade division and an extensive licensing network. The library of course would have continued to expand with the latest arcade titles (arcade to console was normally a year to a year and a half in those days), besides original titles. However the company that launched the 7800 in 1986, Atari Corp., was a completely different company. No arcade division to rely on games from, no in house team (that was just being started up again) and almost no licenses available because most of the "hot" arcade titles at that time were either snapped up by Nintendo's predatory licensing arrangements (which even kept developers from developing for anyone else) or made in house by Nintendo (and SEGA). That's precisely why Katz had to go and seek licenses for titles that had formerly been only on personal computers. Likewise, people seem to forget that the majority of the NES's early titles during it's launch were "older" arcade games (even by your 2 year standard) mixed with a smattering of original titles. 10 Yard Fight was from 1983, Kung Fu Master was from 1984, Wild Gunman was from 1974 (yes 1974), etc. Even the bulk of those original titles had been previously done in 1984. That "original title" renaissance on consoles, or shift from arcade titles on consoles to mainly original titles, really occurred during the NES era after it's rise to popularity. It seems people look at that in hindsight for comparison rather than realize it was an evolution. Prior to the NES' pushing of original titles on their console, the bulk of the in demand titles on consoles were '79-'84 arcade titles, regardless of how "old" it's claimed they were.