In my book I shortly address the SEO issue by saying: "The subdomain blog.yourcompany.com looks arguably better and is easier to host separately; however, it’s also less effective from an SEO standpoint. [6]"
The link you are giving is 5 years old. But more importantly Matt Cutts says this which is not the same as what you are claiming (with support from that link):
"My personal preference on subdomains vs. subdirectories is that I usually prefer the convenience of subdirectories for most of my content. A subdomain can be useful to separate out content that is completely different. Google uses subdomains for distinct products such news.google.com or maps.google.com, for example. If you’re a newer webmaster or SEO, I’d recommend using subdirectories until you start to feel pretty confident with the architecture of your site."
"Personal preference" and "confident with the architecture" doesn't equal "less effective from an SEO standpoint".
Website owners could setup blog.example.com to redirect to example.com/blog easily, and when handing out the URL they could tell people to go to blog.example.com and everyone wins
[6] http://www.mattcutts.com/blog/subdomains-and-subdirectories/