The solution to the puzzle is that "the bitter lesson" is about AI software systems, not arbitrary software systems. If you're writing a compiler, you're better off worrying about algorithms, etc. AI problems have an inherent vagueness to them that makes it hard to write explicit rules, and any explicit rules you write will end up being obsolete as soon as we have more compute.

This is all explained in the original essay: http://www.incompleteideas.net/IncIdeas/BitterLesson.html