They just have to NOT disallow the killing of certain NPCs.
It's more work to prevent rampages than it is to allow them, by far. The latter doesn't take any work at all.
Bethesda just has a screwed up design philosophy, frankly.
And so what if people are going to reload, they still did it. It's fun to spend a few hours killing everyone, and there's no reason to prevent it from being allowed.
Where did they say that they're going to prevent people killing everybody?
I believe he's referring to the time it took to develop the aspect of Radiant Story that allows the game to assign new quest givers if you killed the NPC that was supposed to give the quest.
If you killed everyone in a town, 90% of the NPCs don't really matter for quests, only a few. In Oblivion quest givers could not be killed. Now they can (except for a few NPCs essential to the MQ probably)
No, it's about implementing things that would feel like you're actually causing damage, things that some people would call "immersive". Like when you kill the half of the town, when you leave the survivors shouldn't just get back to their business like nothing happened, killing an entire town should spread some rumors to other towns, killing a shop owner should make the shop deserted...
Implementing these just seem like way too much work for something you won't do in a serious gameplay...