He probably meant "ideal" or "proper".
Confusions and More Confusions

It seems to me that the principled way to destroy white's centre should be 7... c5 (threatening cxd4+ dxe5). For example 8. dxc5 dxe5 or 8. exd6 cxd4 9. dxe7 Qxe7+

It seems to me that the principled way to destroy white's centre should be 7... c5 (threatening cxd4+ dxe5). For example 8. dxc5 dxe5 or 8. exd6 cxd4 9. dxe7 Qxe7+
Ahh you're right! That does destroy the center!
But does it still benefit white?

What is the meaning of the word "principled"?
"a method that follows recognized principles".
Another vote for 7. ... c5

What is the meaning of the word "principled"?
"a method that follows recognized principles".
Yeah, that sound like a dictionary definition. So in chess that might perhaps be a move we feel should be right based on general principles. Of course a concrete analysis could still prove us wrong but in any case we may want to investigate the most principled move first. Chess commentators occasionally use the word.

But does it still benefit white?
I doubt it. White has used many moves to set up the pawn centre falling behind in development. If black manages to destroy that centre then what does white have?
By the way, there's nothing wrong in your position after 7... dxe5 either but maybe it's bit too easy for white. As far as I know, the whole variation with 5. e5 should not be very good.
Another normal game, just making the position look decent (-ly bad), until I blundered a rook and everything went wrong.