A high capacity small square baler will handle long, heavy stemmed grass just fine (well, at least a New Holland 575 will). I am not sure if the main problem this guy had was the fact he had no idea what he was doing or if it was his baler. I am leaning more towards this guy not having a clue but that baler looked in rough shape so its possible that didn't help matters any.
I feel if this guy was serious about what he was trying to do then he should have either had a dealership or at least a modern farmer help him with this project. He was there for months on this project just trying to figure out how to bale long stemmed hay.
And remember, there isn't much difference at all between the pickup on a round baler, large square baler or small square baler yet over here some farmers use their balers to bale corn stalks which is a lot heavier stalk then what this guy was using. The main problems with balking corn stalks is certain round balers have trouble starting the bale. Square balers do not have that problem.