Here's my summary of the article:
With an animation system that models human body actions and reactions, characters can appear more real.That's it. This new animation system is just that: a new animation system.
You can see why the title is misleading: it mentions story development, which isn't about how real the characters are rendered. I'd imagine story development has to do with a lot of things -- writing, pacing, direction -- but not how accurately a 3D model represents a human being. The article offers but one example of this kind of animation technique: a whip-to-the-head animation. How does this involve story development again?
What I keep coming back to is this question: What story development can be done with this new technology that couldn't have been done with well-written, text-based interactive fiction?
They should just go back to using SCUMM. What's a 3D Indiana Jones game without a good story, except a Tomb Raider clone (ironically, what TR was originally inspired by).
Both the Infernal Machine and Emperor's tomb used fancy new 3D engines that didn't enhance the story one bit. I have to admit the fistfights in Emperor's Tomb were pretty movie-like, but that was the only enjoyment I took away from it.
LucasArts' marketing here is all wrong. Don't they realize the brand sells itself? Why try and sell us on the engine? They should be telling us they've come up with an awesome new adventure for Indy. Not that your adversaries will double over if you punch them in the groin.