It essentially means that, as an armed person, if somebody has a knife, is threatening you, and is less than 21 feet away, then your gun should be out of your holster and pointed in their direction right away, because if you wait for them to actually charge you, the knife will probably be sticking out of your chest by the time you can draw and fire.
It certainly doesn't mean that you should shoot the guy right away or anything, but someone with a knife being shot from 20-30 feet away is not necessarily a bad shoot.
Watch some Tueller Drill videos: it's very clear you've got to really have your act together to survive them, and it shouldn't be hard to image someone with their gun already in their hands failing and getting a mortal wound.
It certainly doesn't mean that you should shoot the guy right away or anything, but someone with a knife being shot from 20-30 feet away is not necessarily a bad shoot.