Hubert Dreyfus claims that ``symbolic AI'' is a ``degenerating research program'', i.e. is not making progress. It's hard to see how he would know, since he makes no claim to have read much of the recent literature.
In defending ``symbolic AI'', I shall concentrate on just one part of
symbolic AI--the logic-based approach. It was first proposed in
[McCarthy, 1959], attracted only intermittent following at first, but has had an
increasing number of workers since 1970. 
I think
other approaches to AI will also eventually succeed, perhaps even
connectionism. To contradict an earlier Dreyfus metaphor ``AI at the
Crossroads Again'', it isn't a crossroads but a race including logic
based AI, SOAR, connectionism and several other contenders.
How goes the logic-based runner? In fits and starts, as problems are identified and progress made.
Within logic-based AI, I shall emphasize one development--formalized nonmonotonic reasoning, because it illustrates intermittent but definite progress. It was first proposed in [McCarthy, 1977], gained momentum with the 1980 special issue of Artificial Intelligence, and summarized in the collection [Ginsberg, 1987]. It has continued to develop, see e.g. [Lifschitz, 1993].
Minsky [Minsky, 1975] mentioned the need for something like nonmonotonic reasoning, but used this fact as evidence for the inadequacy of logic-based approaches to AI and the need for approaches not based on logic. This isn't how things have gone. Nonmonotonic reasoning has developed as a branch of mathematical logic, using the concepts, such as that of interpretation and model, that logicians have been developing since the 1930s.
The circumscription method of nonmonotonic reasoning would have been entirely comprehensible to Hilbert and probably even to Frege. However, no formalized nonmonotonic logic was developed until the 1970s. This is typical of the slow progress in developing mathematical logical formalisms. Just consider the sequence, Aristotle, Leibniz, Boole, Frege, Hilbert, Gödel. Each step would have been comprehensible to the predecessor, yet it took a long time for the new ideas to appear. Formalized nonmonotonic reasoning is surely not the last step in the chain aimed at formalizing useful reasoning. Formalizing nonmonotonic reasoning required realizing that there is proper reasoning that is not conclusive and that is often not the same as probabilistic reasoning.
For this reason, neither Dreyfus or anyone else is entitled to conclude that if the logic oriented AI problem hasn't been solved in 40 years, it won't ever be solved. To do that it would be necessary to prove a theorem about limitations of logic. Not even showing that there has been no progress at all would be conclusive. However, Dreyfus makes no reference to nonmonotonic reasoning in his book. That's about 1,000 papers he doesn't know about. However, in answer to a question at a book-selling talk, he said that claiming progress in nonmonotonic reasoning is progress towards AI is like claiming that climbing a tree is progress towards reaching the moon--thus recycling a metaphor from the book.
Although formalized nonmonotonic reasoning was discovered in connection with AI, many logicians pursue it as a purely mathematical study, independent of applications to AI or logic programming (another non-entry in Dreyfus's index).