I always thought that made logical sense. The whole idea behind diversity is that it is supposed to prevent a Georgia resident from being discriminated against in a Florida court, for example. Presumably, neither state nor federal courts would be any more or less friendly to a citizen of the UK. I remember this discussion in law school.
Too bad Posner will not be on the SCOTUS- he wrote a law review article supporting a market in adoptable babies. Talk about something that would look really bad in a confirmation hearing.