Apparently he thinks the Catholic Church is the true Church and considers the sacraments real and are what they signify.
The document was immediately labeled a faux paus by various pundits despite it being a reaffirmation of previous Vatican statements.
Chad helps explain it, slowly, to the mainstream media:
Catholics, like all Christians, have a definition of the "true Church". The Catholic definition is one that has all the sacraments, shares all the faith, and is in union with the Pope. The Orthodox Churches have all that except for union with the Pope, so they are "true, particular Churches" but are lacking an important aspect. Protestants, have a valid baptism and many valid marriages, but they have not maintained apostolic succession through the sacrament of ordination. It is because of this that they are not true Churches in the Catholic sense of ecclesiology (and they don't claim to be!).