He writes in response to PETER DECHENEY's piece which provides details on US trade agreements and legislation that extend copyright to foreign copyrighted works that had not previously been covered as they were in the public domain and the period of copyright by another 20 years link here. Yglesias point was a simple one: that so much of what is produced in the arts is derivative (i.e., it has a hard time being anything else), covering more and more works with copyright greatly complicates and raises the cost of producing new works you have to get "rights" or permission at cost in both time and money.
Validation for his point can be found in the many works that have not been produced like plays as the cost of getting the rights proved impossible to cover.
A day later, Robert Barnes goes into the same subject link here. And with lots of examples of the rise in the cost of producing or performing such derivative works. "Orchestras used to be able [to buy the score to] the Prokofiev symphony for $100, he said, and play it until the sheet music was worn out. Now it must be rented, at a cost of several hundred dollars for each performance.
Thus, copyright meant to encourage innovation does exactly the opposite.