I have always found this kind of reviews deeply puzzling. He says the paper contains many interesting and innovative ideas that deserve to be presented to the perception community, but he recommends rejection! In my own limited experience reviewing papers, I have found most of them to be so mind-numbingly boring, that I would have been delighted to get one like this.

The reviewer's chief concern seems to be that the model is not tested against other specific models to make sure that it provides a better account for various specific perceptual phenomena. The problem is that the reviewer is judging this paper as a theory, when in fact it is really a paradigm, i.e. a challenge not to the details of alternative models, but to the foundational assumptions on which those models are built. It seems that very few reviewers understand this distinction.

I am proposing a different way of looking at the problem of perception. I propose to challenge the commonly held assumption that the hierarchical nature of the visual cortex necessarily suggests a sequential progression from lower to higher levels. This hypothesis, even without further evidence, is a significant possibility that needs to be investigated. The fact that a number of different illusory phenomena can be explained in this manner is highly suggestive.

This reviewer seems to think that all scientific hypotheses take the form of "normal science" in which models (within the same paradigm) are compared side by side to see which one can best account for the data. A model that fails this kind of test is not even worth publishing. Paradigms are different, because every unique and original paradigmatic hypothesis deserves to be exposed to the wider community to allow them to judge it on its merits. Because the existing paradigm (in this case the assumption of a sequential progression through the visual hierarchy) is itself merely a hypothesis which was never proven beyond a shadow of doubt, but has become the dominant paradigm simply by default. The new hypothesis should not be held up to a higher standard of proof merely because it is proposed at a later date.

Here are some pertinent quotes from...

Kuhn T. S. (1970) The Structure of Scientific Revolutions. Chicago: Chicago University Press.

p. 12
"To be accepted as a paradigm, a theory must seem better than its competitors, but it need not, and in fact never does, explain all the facts with which it can be confronted."

p. 23
"Paradigms gain their status because they are more successful than their competitors in solving a few problems that the group of practitioners has come to recognize as acute. To be more successful is not, however, to be either completely successful with a single problem or notably successful with any large number. The success of a paradigm is at the start largely a promise of success discoverable in selected and still incomplete examples."

p. 93
"Like the choice between competing political institutions, that between competing paradigms proves to be a choice between incompatible modes of community life. Because it has that character, the choice is not and cannot be determined merely by the evaluative procedures characteristic of normal science, for those depend in part upon a particular paradigm and that paradigm is at issue. When paradigms enter, as they must, into a debate about paradigm choice, their role is necessarily circular. Each group uses its own paradigm to argue in that paradigm's defense."

p. 93
"...this issue of paradigm choice can never be unequivocally settled by logic and experiment alone."

"if a new candidate for paradigm had to be judged from the start by hard-headed people who examined only the relative problem-solving ability, the sciences would experience very few major revolutions. But paradigm debates are not really about relative problem-solving ability ... Instead, the issue is which paradigm should in the future guide research on problems many of which neither competitor can yet claim to resolve completely. A decision between alternate ways of practicing science is called for, and in the circumstances that decision must be based less on past achievement than on future promise. ... A decision of that kind can only be made on faith.

p. 157
"Something must make at least a few scientists feel that the new proposal is on the right track, and sometimes it is only personal and inarticulate aesthetic considerations that can do that."