Odd dialogue in Confession

The episode Confession has some odd dialogue in it:

Policeman: "Says here you wrote something for a television program called Tales From the Crypt. What's that?"

Suspect: "Ancient history, years ago. I was a kid. They rewrote everything I did. It's been canceled now. Serves them bloody right."

Two things are odd about this:

1. How can it be canceled unless the episode takes place in the future? Is the episode supposed to take place in the future?

2. In that dialogue, the writers seem to be directly acknowledging that Season 7 was sending the show downhill, big-time.

What do you think about these things?