Physically, the key phrase is just before all this: the initial flat background space is no longer observable. In other words, you can try to model gravity as a spin-2 field on a flat spacetime background, but what you end up with is a curved spacetime--in other words, you contradict your starting point. The spin-2 field view still works as an approximation in some scenarios (for example, in studying gravitational waves), but it is not a fully general model the way the curved spacetime model is. A proper reading of MTW (or even better, reading the actual primary source papers that MTW references) makes that clear.