Yes, they do dive. Not to single out any one nation, but the Italian team spends so much time on the ground that some of the players have developed primitive root systems.
I think he's right that at this level in football scoring a goal is incredibly difficult, requiring almost a miracle to be somehow conjured, and this is what produces intense catharsis:
Scoring a goal in soccer is one of the most difficult feats in sports: Everything favors the defense, so the offensive players usually have to do something brilliant just to get off a halfway decent shot. That's why there aren't many goals. But that's also why, when the goals do come, they tend to be spectacular. And because goals -- especially World Cup goals -- are so rare and valuable, the tension preceding them is often deliciously unbearable, leading to the cathartic moment -- GOOOOOOALLL -- that can cause an entire nation to erupt in joy.
I think it's just fortuitous that the rules and gameplay have evolved over 150 years to produce this level of almost-impossibility which gives the goal scored or saved that freight of meaning - like I was saying about the best TV drama - such that a few seconds become incredibly dense with significance, and yet improvisational and unpredictable, in a way that (say) a sprinter breasting a tape is not.
And hence, like the most developed modern TV drama, it is very well suited to modern communication technology, because these uniquely freighted moments can be captured and relived - and are complex in themselves, and in context. Nobody designed it thus, but it has fortuitously evolved to fit the media and the social use of the media.
andrewducker points at this Nike Advert (below the cut), which I think brilliantly conveys this social freight and re-echoing. You see a football match, a player performs an iconic action, and then you see that movement spreading and replicating - on Youtube, in The Sun, in an episode of the Simpsons, in a statue in a square, in children play-acting in the street. Like Maradona's 'hand of god': still a cultural reference 24 years later.
ETA yes that is Hocus Pocus by Focus, a cultural icon all of its own.