The distinction is merely about the flow of funds. Adding funds arbitrarily into bank reserves just obfuscates the insolvency of the debt/money issued by the banks themselves. So any imbalances created during the expansion period stay imbalanced, rather than having the opportunity to correct. 

The Fed is usually a reactionary agent, responding to crises caused by the printing/issuing of new debt by the fractional reserve system, and then backstopping it when the economy tries to correct the malinvestment.

I am familiar with his thoughts, and while technically right in a sense, I don't think the distinction is very important in the bigger picture. It has all of the same negative consequences and doesn't change the underlying reality. It merely changes whether it precedes or follows the problem of debt issuance from nothing.

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Example: If I print money and loan it to you (I'm a bank), it will distort market prices, it shifts real resources from real savers to me and you, while you pay me interest on money I never earned or owned, economic and social power shifts into our spheres at the explicit cost of those who actually created the resources we are consuming, then when it all comes crashing down because we were systemically overextended, the Fed jumps in and just bails you and I out, cementing the imbalances/unfairness that we created. If I just keep that new money on my balance sheet to bolster the loans, it doesn't fix the problem... 

Had the Fed printed the money on the frontend, they'd have caused the imbalance, and when they do it on the backend, they merely prevent it from fixing itself. In the end, the problem is the same and its about how the entire system works to feedback every other part of it, the Fed, fractional banks, govt bonds, all of it.