The Calico Cat presents some curious arguments against index funds.

• Index funds still have risk

OK, this is true, but they're still less risky than owning individual stocks.
• Why settle for merely matching the index?

Like a lot of individual investors, he assumes that he's smarter than the average person. Even if I wanted to spend my time and energy on this, the last time I tried I made poor returns on my investments because of brokerage fees and capital gains taxes.

• Index funds exhibit a bias towards overpriced stocks

Even if you accept the argument that the S&P 500 stocks are overpriced, this is not the only index that funds track.
• Index funds endanger the stability of the markets

This is just silly. He says that if everyone invested in an index fund, the markets would become unstable. But because there are too many people who (mistakenly) think they can beat the market, most people don't invest in them.