I don’t think codinghorror is primarily referring to your site security. Instead he is referring to site performance being compromised.
You will be encouraging users to choose the minimum permissible set of usernames. A lot of people will use their 2 or 3 character initials instead of a more meaningful name.
Reducing variability concentrates more users on the final branch of the search tree increasing processing time for autocomplete.
You can see how entropy and the scope for variability reduce by comparing namespaces at different username lengths. If every unique minimum-length (A-Z, 0-9) username were to be used then there are only (26+10)^2 = 1,296 two character usernames. Whereas there would be (26+10)^5 = 60,466,176 five character usernames.
So one impact of lower entropy is likely to be longer autocomplete lists where all options are not visible to the user, e.g the username UU could be 20th in the list.
Of course there are also security issues around a more cramped namespace e.g across systems it makes structures more guessable and profiling simpler e.g. https://freehaven.net/anonbib/papers/pets2011/p1-perito.pdf