They said "It would make it very difficult for Blizzard to do a Diablo 2 remaster because all the assets we used are pretty much gone. They'd have to make them from scratch."
I can't think of any other way of interpreting it.
To be fair it wouldn't surprise me - this sort of thing was pretty common back then. You'd create high def 3D models and then render 2D sprites etc from them.
Can you point to where? I can't find it, and a quick search for "resolution", "high", "quality", "def" turned up nothing. They say they lost the art assets but a bunch of pixel art tilemaps would fit that description, especially if they were composited down during the build process.
I can't think of any other way of interpreting it.