I think he's over-simplifying matters when he writes about Passive vs. Active SEO. The reason there hasn't been a lot of distinction between the two is because there is A LOT of overlap between the two. There are many sites that have a ton of great content that the search engines would love to index, but they are invisible to the search engines due to poor link popularity or inaccessible internal linking within the site itself. Seth also talks about using different people for the content and link building aspects of the site. It's always a good idea to specialize, but it's also possible for a good SEO to handle both parts of the equation.
Also, I think it's a little misleading to call the on-site stuff "passive" and the other "active" because there's nothing passive about ACTIVELY writing content and improving your own site. It takes a lot of work and could be considered more "active" than the link building. Especially when done right, good content will draw a lot of "passive" links to your site, so it makes it hard to really draw a line between the two as active and passive.
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Good point Dave, Perhaps keeping the categories as On Page and Off Page are the best.
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