I thought this too. Bg4 is still considered a good move but I think it's because there isn't as much point in having the bishop on g4 on move eight because black wouldn't have any attack on white's center because he hasn't built it yet. I suppose white would try to get the knight to g3 at that point and then d4 but if white had already played d4 with the pin white would have to defend his center. Bg4 still looks good though since white probably shouldn't play d4 at that point.
Ruy Lopez Closed

The theory about Bg4 and h3 was developed during New York 1924. There were several games in which Black used the Bg4 set up which, if I remember right, gave Black long-term chances only if he was castled first. It was after this tournament that White pretty much universally adapted h3 to prevent this. But even then, White has allowed 9....Bg4 with a different type of Spanish Torture ensuing. The Closed Ruy is a brutal opening, regardless of color, and there are no easy answers or short cuts.
After 1.e4 e5 2.Nf3 Nc6 3.Bb5 a6 4.Ba4 Nf6 5.0-0 Be7 6.Re1 b5 7.Bb3 d6, the theory goes 8.c3 0-0 9.h3 to prevent ...Bg4 which would give black the chance to fight for the d4 square. Does anyone know why Black doesn't play 8....Bg4 instead and because of that, should white play
8.h3 instead?