He never said anything about quantity over quality, he is talking about how it doesn't make sense anymore to invest as much as studios (and even himself up until this point) do on any single given feature.
It's much better to spend less money on more features, because then you aren't putting all your eggs in one basket.
He is also talking about the trend of downloadable content and it's potential to further marginalize the theater market.
He has a point, people are getting tired of paying top dollar for crappy presentation and candy and popcorn marked up 300-400% or whatever ridiculous percentage it is now (I haven't bought concessions at a theater in years). Why do that when you can just watch it in better quality on your home theater with reasonably priced snacks, and if you want to smoke, it's up to you. If you want to pause while you hit the can, you can do that.
Even with your narrow view of what you think Lucas said, I still don't see how you got "would sell his dead cat for $5".
Say what you want about his movies, but most of them have done extremely well, which would indicate that not everyone thought they were complete crap.
I for one would line up for 120 hours of Lucasfilm goodness.