Rummy may or may not have said it artfully, but the fact is this is 2004, not 1941. All of the nation's manufacturing plants have not been converted to war use as they were in the 1940's. Many items are produced by only one or a handful of manufacturers, who themselves rely on a limited pool of suppliers for parts and materials.
So I defy anyone to show me how what Rummy said was in any way incorrect. There is a supply choke point due to limited manufacturing resources. You do go to war with the army you have, not the one you wish you had. He told the soldiers the truth, and pretty bluntly. Would they have preferred he lie to them and feed them the usual bunch of political spin?
That reminds me of something I heard on the House or Senate floor once. I think we only have ONE steel plant that is able to produce the steel needed for the armor