In Bob Burrough’s words (Burrough is the author of the demo):

An environmentally-lit interface takes information from the environment around the device and uses it to render physically-accurate things on the screen. It appears as if the lights around you are shining on the things on the screen. […]

This doesn’t mean you have to hold a flashlight over your phone to read the web in bed. What it means is, designers are empowered to use the design language of the physical world to design their interfaces. Gloss, glitter, glow-in-the-dark, or any other visual quality may be used. In the case of reading a website in a darkened room, the web designer may apply elegant backlighting or glow-in-the-dark treatments to maintain legibility. This is far superior to today’s method of making your phone act like a spotlight that shines in your face.