I did not watch the entire video, what I saw was placing blocks only. In my efforts to make extended reach work in SMP I discovered that I could indeed place blocks far away from me. However, the server protects against block removal at longer reaches. As placing blocks is only half of what extended reach does normally, I did not find that sufficient to post here.
Instead of breaking blocks from a distance in SMP, how about interacting with mobs at a distance? I've seen this happen on SMP but I have no idea what mods they're using to do it.