The essence of his comment was that by building shared services, a really good software distribution solution and being really good at replacing broken machines IT services still have a role.
He's correct. You can do that. In fact I've built and run a service elsewhere that did exactly that. It was good and it was, on the whole, valued by users. One of my better moments was when a professor, who shall be nameless, emailed me from his new university to say he apologised for all the grief he'd caused us. But we never got more than 60% of the staff.
But some time along the way I began to suffer doubts and wonder whether all that had been created was a job preservation behemoth. And then I changed jobs several times. The first was to a research institute that, in the main gave staff laptops and expected them to work offline part of the time. Yes they shipped out a standard build of core applications, but on the whole staff added extra applications as they needed them. That worked well and the really key services were folder and mail synchronisation when staff came back onsite after fieldwork.
Then I went to another research institute. There the desktop was locked down, standard apps, and IT staff had to install anything extra that was needed. That also worked well, and because it was simple and well locked down it was easy to deal with staff, some of whom did not have great skills in IT. Of course we had a whole lot of specialist boxes that did odd things but we didn't talk too much about that.
And then I came back to work at a (different) university. One where the centre had never really done desktop provision, the faculties had. And this of course meant that we had a range of qualities of service provision.
And services in common, or core services, call them what you will is probably the way to go. Allowing staff to have (and pay for) those applications they need, self install, gives great flexibility. Setting standards for document interchange and providing core facilities for collaboration allows staff to work in the way they find optimal while allowing us to avoid the massive problem of managing hugely different sets of needs and aspirations, and then by providing the key services in common - storage, web, email, manage the services that scale well and are best managed in big chunks.
And of course it can be cost effective to outsource some of these chunks ...