This is a great description of why motors can make a big difference in racing. Even small differences in power output can make a big difference in an elite race where so little can mean the difference between winning and not. It's easy to imagine using a tiny motor (much smaller than the one mentioned in the article) could make the difference between winning and being an also ran.
However I have to nitpick on one point:
"Even a 2.5W power boost could be a game changer. If your muscles put out 250W, 2.5W is 1% more, which is significant. It's about 36 seconds shaved off a one hour haul."
Air resistance is one the most significant factor affecting riders at race speeds, and its force increases at a much greater than linear rate. You'd need about 3% more power in your example to save 36 seconds. In a flat time trial over one hour, 1% extra power would actually save you closer to 12 seconds. That said, the Tour de France has been won by less.
Also, a boost gives you a tactical advantage: an advantage of psychology.
Firstly, in a race, it is psychologically challenging to be the leader of the pack. Are you really faster than those behind you? Or are there opportunists nipping at your heels, wearing you down, who will surge by you when the goal is in sight? With a secret boost, you can overcome some of this uncertainty.
Likewise, you can use the boost to surge by opponents after tailing them for extended distances without the boost. When you surge by someone, it has a mentally devastating effect on them. You show that you have untapped reserves that they don't, which creates the belief that you cannot be beaten. In the absence of cheating, that belief is just a belief. The playing field is level: by trying to create the belief that you are stronger and faster, you're taking a risk (because it's not a given that you actually are; you're faking that out with a little surge that you could well pay for later.)
I believe that with a hidden motor, you can not only reduce your own race time, but make someone else's race time worse. You wear them down with an unrealistic pace, either as a leader or follower (pressure from the back) which you can then maintain yourself thanks to the motor, while they blow their race.
And then, here is the thing. If you win by tactics, that doesn't have to involve coming anywhere near the best time for that course or a world record etc. You get everyone to screw up, and then cross the finish first, but in some credible time that doesn't draw attention to your performance, seconds or minutes behind the best time that was ever observed on that course. That reduces the suspicion of any cheating, unless your splits over the course are scrutinized.
Yes, the math says so. Have a look at the video I posted above though. While E-assist bikes can do this, these hidden motor versions just don't in the real world, for racers. I do believe it will, at some point, I just don't think it's there yet. There's just no money in developing it right now.
However I have to nitpick on one point:
"Even a 2.5W power boost could be a game changer. If your muscles put out 250W, 2.5W is 1% more, which is significant. It's about 36 seconds shaved off a one hour haul."
Air resistance is one the most significant factor affecting riders at race speeds, and its force increases at a much greater than linear rate. You'd need about 3% more power in your example to save 36 seconds. In a flat time trial over one hour, 1% extra power would actually save you closer to 12 seconds. That said, the Tour de France has been won by less.