The current size of iOS updates runs into excess of 600 MB. Delivering such a huge update Over-the-Air has to have a robust cloud infrastructure backing it. According to the report, Apple may also plan to release the update in small patches rather than one single huge update.
Also, since this year's WWDC would be clouded with iOS and OSX news, Apple might plan to not release the iPhone 5 at all and push it back to the next year. MacRumors, another Apple-centric blog, has even quoted a reader who got the heads-up about the iPhone 5 delay from a AT&T customer service representative.