Presumably he could write his own code- and data-munging tools in Smalltalk and invoke them straight from the running image -- kinda like what you can do with Emacs Lisp.
That's fascinating. At least Emacs comes with an editor, can't say as much for Squeak. I mean, it has AN editor, its just not very good compared to something like Emacs or vi, and I'm talking editor functionality, not everything else. It's more like a lightly enhanced Text Area.
But maybe he put a lot of work into it to be a better Perl editor.
For them, presumably the same thing that emacs has over Notepad++ for me (though not IDEs, universally, just most editors). Emacs (as an environment) is almost fully extendable in user code with much greater ease than most other editors. And not just in a "write this plugin, place it in the right directory, and restart the editor" sense. In the more extreme sense of you can extend it live, even just temporarily. Squeak, as an environment, is very similar to that experience, probably even more extreme than what emacs offers in some ways. If it had a larger community behind it (to use in this style), I'd certainly entertain it.