It was a two lane road in each direction (rural divided highway) and he was moving into the right lane as he coasted and slowed down.
People cruise in the right lane because that's where they are supposed to cruise. Typically, you're expected to move out into the left lanes only when you're going faster than traffic on the right and move back when you can. On large multilane highways with many exits and entrances this doesn't always work out but on a rural highway with only 2 lanes in each direction you should definitely move over to the right when you're going slow.
This guy with the erratic driving was going to block up traffic no matter which lane he picked. Slowing down to well below traffic in the right lane would make everybody have to move over and pass him, most likely causing a bit of a blockage as they did it. Staying in the passing lane would cause issues if anyone in the right lane happened to choose to go slower than others (say 60 when everyone else wanted to cruise at 70) and they end up side by side with the hypermiler. This blocks everybody and they can't get past until the hypermiler coasts down enough to open a gap. Even then, rather than each car going 70 mph moving over and passing as it overtakes the driver going 60 mph without having to change their speeds they'll have to slow down to 60 mph, wait in line until the other cars ahead of them have passed the 60 mph car and then go.
Even if the hypermiler is saving gas for themself they are causing other people to slow down and then accelerate again. Overall I would think that the effect on all the cars around them would be a net drop in efficiency as compared to if they just cruised at a relatively constant speed and let people move around them if they wanted to go faster.
I'm all for people driving economically, choosing an efficient speed, not flooring it away from lights, and not accelerating up to a stop. But you need to be consistent when there are any other cars around you. You might know exactly what you are doing but the other cars can't read your mind. The easiest other cars on the road to adapt your driving to is one that is acting consistently (even speed and stays in the correct lane). You can understand what they're doing, how to stay out of their way and how to keep them out of yours.