I get where he's coming from, but there are more indies now than there ever have been before. Because of relatively new developments like crowd funding, non traditional distribution, and increased tax breaks in states trying to become movie and TV friendly, it's easier than it ever has to make an indie. I mean sure you can worry about piracy, but that comes with a bunch of stuff that even allowed the movie to get made in the first place.
I think the moral of the story is that if you cant get real distribution, $500,000 is a no mans land for the budget of an indie. Either go much smaller knowing that VOD is not a reliable way to repay investors, or only make the movie if you can raise about a million and get real distribution. I mean studios LOVE the horror genre because they can be made on small budgets without big name actors and consistently hit doubles. Unfriended was completely unremarkable and was made for a million and made 59 million in theaters.