He's not quite saying that, haha, but this is the actual argument he's making:
Sometimes adding a 3rd variable, while a worse individual option in a bubble, results in the first 2 options becoming more successful simply through it's introduction that it's actually better overall.
Imagine Illinois only shoots latups or threes and the shoot them at the following clips:
Layups (40%of shots): 57% shooting
Threes (60% of shots): 36% shooting
So overall, you expect 2pts*.57*.4×3pts*.36*.6.= 1.10pts per shot on average.
Now let's introduce those inefficient midrange shots at say a 48% shooting percentage. You seldom do it, only 10% of the time, but in doing so your opponents are forced to defend it and , and as such your 3pt and layup shooters are getting more space and better looks so now you're hitting layups at 61% instead of 57% and threes at 40% instead of 36%. Your shooting now looks like this:
Layups (37% of shots): 61%
Midrange (10% of shots): 48%
Threes (53% of shots): 40%
So now you'd expect 2pts*.61*.37+2pts*.48*.1+3pts*.4*.53= 1.18pts per shot on average
Again, these are fake numbers, but sometimes adding something that by itself is less efficient actually increases overall efficiency by making your other parts more efficient than they previously were.
If I could give a real world example of this, it'd be something like spending time writing and following detailed work instructions for an assembly installation. It's inefficient writing them as it costs time, however, it allows your workers to complete the overall job faster with less mistakes and rework such that it more than makes up for the time spent creating these instructions. Hope that explains things a bit better.
The hole in this though is that I don't think you're going to get teams selling out to stop a midrange shot to the extent they are going to give you open layups and threes. If a team starts mixing in midrange jumpers, the reaction to that is not to change your defense to stop it, and then start letting them have more open looks from 2 feet or the three point line, but rather, the reaction would be to just let them have those shots.