I had a chance to hear Judge Moshansky speak in person last year. My understanding is that he is not against SMS itself, in fact he considers it a very good development (as I think the article says). SMS, when added to the existing safety infrastructure, has a lot of potential for decreasing the accident/incident rate.
However, it seems like Transport Canada is implementing SMS as a replacement for the existing system, outsourcing its safety responsibilities, as it were. Indeed, this was the message from Merlin Preuss at CASS 2006... from memory (so don't call this a quote or anything)... that fiscal constraint at the regulatory level and the expansion of the aviation industry have made SMS a necessity. Basically, TC doesn't have enough money to accomplish all of the regulatory activities they are charged with carrying out.
However, this was the principal thrust of Judge Moshansky's conclusions following the Dryden inquiry: that the downsizing of government in the 80's (at least in Canada), aka "fiscal restraint", and at the same time de-regulation of the industry leading to an explosion of growth in necessary certification activities (everybody and his brother was opening a new airline at the time), led to a situation which allowed the Dryden accident to occur. Reading the Moshansky report is a real eye-opener.
Right now, based on the Dryden experience, it looks like we may be seeing the foundations being laid for a future accident, which with hindsight (like with almost every accident) everyone will say was preventable if only sufficient funds had been invested, etc.
SMS is not a bad thing, but I think it's being implemented for the wrong reasons, or rather some people are using it to further goals which are not necessarily safety-related.