I don't know the Archbishop personally, so I'm not sure what he meant by it. I'm willing to give him the benefit of the doubt, however, and assume a Catholic meaning, in light of the rest of the Archbishop's life story.
It was probably from Rome's point of view when he said "a place for Tradition within the Church" because the Church IS traditional by nature, and he knew that. I happened to learn that from an SSPX seminary, which is part of the organization he founded.
You don't start out assuming the worst and taking drastic action. A prudent man will exhaust all other options first. He will work within the system -- using normal channels -- until that becomes impossible for one reason or another. I think the Archbishop was hoping that the modernists were just a faction -- one that could be held in check by an opposing, traditional Catholic faction. Alas, the modernists were much better organized and soon got the upper hand.
He was hoping that, although Rome was bent on this new religion, they would pay enough lip service to the old Faith that the unblemished Catholic Faith would be allowed to prosper as well. Alas, he was wrong. They understood as well as he did how diametrically opposed the two systems (Catholic and Modernist) were.
There are certainly very evil men in the heirarchy, both in 1965 and in 2008. The Church has had evil men in her bosom before, as well as popes in mortal sin, so in a certain respect this crisis is nothing new. But in another aspect, it is unprecedented in its depth and gravity. It is actually a new low -- lower than the Great Schism (2 or even 3 competing popes) and lower than the Arian heresy.
Matthew