He meant the letter "Z" is not considered a semi or premium letter. A premium letter is one that is used often in common, generic words. I am not sure how domainers developed the formula (see below), but their research shows the break down of letter ratings for short domains (ll, lll, llll) of which LLL domains with all premium letters should be more valuable. The best premium is one that spells a generic word (example: car) followed by the next level of premium which is a LLL that has a repeating premium letter (example: css). You typically want to obtain short domains that make up generic words and I am not sure where acronyms fit in, but I consider an LLL such as "ftw" as a valuable property. Note that ftw consists of two premium letters and one semi-premium. Hope that helps!
Premium
a b c d e f g h i l m n o p r s t
Mid
j k u v w
Low
q x y z