That study is very poorly titled. Rather than "arthroscopy", the title should identify "arthroscopic joint resurfacing" as the intervention that does no good. I don't think they're doing this very much anymore - going in with a tool and sanding down your articular cartilage to make it "smooth," probably because of this study. Articular, or hyaline, cartilage is a complex 3D material that is very strong against compression, and when compressed becomes 100 times more slippery than ice, allowing our joints to freely rotate nearly free of friction. But despite this strength under compression, hyaline cartilage has a fragile structure and is vulnerable to shear. Once the surface is torn it doesn't perform as well. I guess the thinking was that if there is a surface tear then why not go in and "smooth" it all over? But the 2008 paper in the OP showed that it didn't work.
More recently, studies have shown that 1) hyaline cartilage, contrary to long-held belief, is continually repairing itself. Studies on animals have shown that even large defects (tears and divots) can fill in and heal on their own. But it's not clear what conditions favor this. Clearly, young people have a greater capacity to heal, and it may be that we are damaging our joints continually throughout life, but only when we get old does this damage not get repaired. Once the hyaline cartilage stops repairing itself, there seems to be a reversal of fortunes - where the body starts breaking down the cartilage instead of repairing it, and then you've got osteoarthritis. 2) stem cells produced by our own bodies are critical for cartilage regeneration. Young people have more stem cells floating around that can be used for healing, while old people have few. The use of autologous mesenchymal stem cells, harvested from our own bone morrow and then re-injected into our joints, arthroscopically, has shown promise in regenerating hyaline cartilage in veterinary medicine for some time and is being offered by a handful of clinics in the US and around the world for people. This is not well studied and not yet considered a "bona fide" form of medicine. Exercise increases the production of stem cells in our bodies, which may be one of the reasons why people with osteoarthritis do better with more exercise rather than less. 3) pastes made of cartilage, sometimes mixed with stem cells, have also shown promise to regenerate divots in hyaline cartilage. The paste is placed into the defect arthroscopically and apparently will be incorporated into the cartilage in time, healing the defect..