[sdenton4]

I read that not as 'step algorithms' but as 'algorithms requiring N^(O(1)) steps'; in other words - polynomial time algorithms.

One way to think of this is in terms of galactic algorithms, which are algorithms that incrementally improve the exponent in a polynomial time algorithm, but have constant terms so huge that they're effectively useless, practically. He's suggesting that there could exist a polynomial time algorithm for an NP problem which is similarly useless - but with the additional caveat that we won't even be able to prove theorems about it!