The rest of the article is full of assurances that Beijing's pea soup is mostly due to humidity, not pollution, that the Chinese have really made great improvements in the quality of their air, and that the athletes aren't worried.
When I lived in Toronto I biked to work, and one beautiful sunny morning I was enjoying my morning ride when I suddenly doubled up puking. I walked my bike home, turned on the radio and heard that there was a smog alert and people were advised not to jog or bike. It wasn't hazy or smelly and didn't seem to be polluted at all. I learned my lesson that day not to go out on my bike without checking the air quality.
The idea that athletes are going to push their bodies and their lungs to the limit in air that is 40% worse than air that made me vomit is just, well, mind boggling.
I agree with this UK columnist that this could result in short-term discomfort and long-term physical damage to competitors, and a whole mess of law suits will ensue.
Update, Sunday August 10: The BBC says that its measurement of Beijing pollution today is 278 micrograms of particulate matter per cubic meter.