It shows the capabilities of creating resolution-independent imagery using CSS. In other words, you can generate non-photographic imagery using CSS that will display with clarity regardless of the DPI of the device it's being viewed on. Got a Retina MBP? It'll look good. Got a non-retina iPad? It'll look good.
It's really powerful stuff, and the trend of user-interfaces is rapidly shifting away from image-heavy UI's to CSS-based UIs which typically download faster, and can be updated in-code without needing to re-slice up a PSD file to accomodate the desired changes.
What a horrible trend. CSS = Cascading Style Sheet. A tool explicitly designed to de-couple semantics from presentation.
Not to mention it's usually a case of "If you're using a bleeding edge browser beta, but not that browser, only this one".
It's unintuitive for building such things, which is why there's such a "gee whiz" factor, that you don't see when someone draws an iPhone in Adobe Illustrator.
I get the hack, I get the fun. But anyone who seriously advocates for a UI built of CSS bastardizations is "doing it wrong", as they say.
Why not invest that energy in SVG support and tools for browsers? Creative tools will be more powerful and flexible. And it'll "just work".
You're taking this whole thing the wrong way. This was not meant as a display of a practical use for css3. What it is, is a display of the potential power of it. It's implied that although you could create graphics in CSS now, you shouldn't.
I disagree with your take on UIs moving toward CSS too. Your parent has an excellent point about not needing to recline PSDs. Now, I'm definitely not saying we should all heavily rely on CSS for every UI element we can but I certainly think its great that we begin to use CSS for more UI elements than before like navigation bars and dropdown menus, buttons, and lots more. There's still is and believe there always will be a need for traditional graphics in UI designs for a long time to come. I think only a fool would suggest that CSS, SVG, and other technologies will replace traditional graphics but at the same time less reliance on traditional graphics is a good thing for everyone from designers to developers and even end users.
The trick is to be smart about their application. Some parts of css3 are supported widely enough to be viable for use as a replacement for some graphics. Traditional graphics can look quite ugly depending on your system while css3 replacements look better. The opposite is also true of CSS looking terrible and not being able to compete with traditional graphics. A good front end developer knows when to use each. Bending CSS in ways it wasn't meant to be bent or using features that have terrible support or are overly hackish/complicated is obviously something we shouldn't do ever but we are getting to a point where these new tech oldies are viable replacements. I applaud the people who create such unrealistic (in the sense that they shouldn't be used in production) demos because by pushing the limits of what something CSS can do means that some of their work will become more widely adopted and supported in browsers. It's e demos that push limits like this that get us to the point where we can reasonably start using CSS3 in place of some UI elements. The language will also evolve to make certain techniques better and easier. It was because of many of the ways we used JavaScript for interaction and design that CSS now includes features like transitions and it can only get better.
Finally, your comment seems to me like it's coming from a place of black or white thinking. It feels to me like you're just shy of saying "We should not use CSS for UI elements and only graphics". I agree with some of your sentiment but I think it's better to embrace most of the new features of CSS while still being smart about their application. A lot of designers and developers will go nuts with them and use them when they shouldn't like when the blink tag and other goodies were first introduced into HTML in the 90's. That's just what happens. But there are still many of us who know that with great power comes great responsibility and won't go around replacing every UI element that used to be a graphic just because we can.
It's really powerful stuff, and the trend of user-interfaces is rapidly shifting away from image-heavy UI's to CSS-based UIs which typically download faster, and can be updated in-code without needing to re-slice up a PSD file to accomodate the desired changes.