In normal times, you’re correct. Banks hold only required reserves and invest any excess reserves (or turn excess reserves into required reserves by issuing fiduciary media through credit creation).
In the last few years, the Fed has been paying interest to banks on reserves they hold as account balances at the Fed. Given the climate of investment in the economy, banks have decided to invest in excess reserves themselves. The quote reflects this situation and not the normal one.
But your point is still well taken. Several Austrians made a similar point after the Fed built excess reserves up from almost nothing to $1.6 trillion dollars. If banks return to normal operations by converting their current excess reserves into required reserves by issuing fiduciary media through credit creation, the money supply will increase by $25 trillion dollars. Currently M1 is $2.3 trillion and M2 is $10 trillion.
If the Fed had increased excess reserves to $50 trillion, then the monetary inflationary potential could increase the money supply by $800 trillion, If, instead, the Fed printed the $50 trillion and buried it in the ground, they wouldn’t face the problem of unwinding that amount of excess reserves without serious price inflation. As it is, the Fed has to worry about unwinding an inflationary potential of only 10 times M1 and 2.5 times M2.