Alt attribute is a substitute of Anchor text in a regular text link. May be a bit less influential, but it influences rankings.
If you want to see how important the Image Alt attribute is, just remove it from one of your ranking pages. Watch what happens.
Alt tags can be very important on images since they may end up being used in Google image searches. I get a fair bit of traffic this way.
Yep, massive fail. The sad thing is, his homepage is a SEO Guidance site and no doubt will be offering "Professional SEO Services" in a week.