Pretty sure the explanation is just technobabble, with no coherent rationale for why their lifespans couldn't be extended in terms of any real-world science, telomeres or otherwise. Someone asked a question about the science in Tyrell's dialogue on quora.com here, and got one answer from "Joshua Engel" saying "Well... ethyl methyl sulfone is an alkylating agent, and it is mutagenic. ... The rest is gibberish", followed by a much more detailed answer from "Zachary Williams, Graduate Student, Molecular Microbiology, Tufts University" which I'll just quote in full:

As Joshua said, the rest is gibberish, but there are different levels of gibberish, i.e., some parts are just wrong, and other parts could be characterized as "not even wrong."

1: " To make an alteration in the evolvement of an organic life system is fatal. A coding sequence cannot be revised once it's been established."

Common misconception. The vast majority of possible point mutations in the human genome are very close to neutral in their effect on phenotype (i.e., observable changes in organismal form and function). There are a number of reasons for this:

First, most of the human genome is...well, I will not say "non-functional," 'cause that would piss some people off, so, instead, I'll say, rather, that any potential function is not constrained by sequence. Maybe it's a spacer or has some global structural significance (a la centromeres), but it shows no signs of purifying selection. You can google the Encode controversy if you want to get way more reading material than you could ever finish on this topic... Anyway. Also a lot of it is clearly derived from transposons and/or viruses, and while such sequences can be co-opted by evolution to serve some function, most of them are pretty clearly not. For one, all the genes tend to be mutated and deleted all over the place. Also, you see little islands in the genome where a number of unrelated transposons and/or endogenous viruses are crammed together, which I like to think of as "islands of no selection," where any old DNA sequence can jump in with no consequences to the host, leading to an accumulation of junk, over many many generations.

Second, for protein coding sequences, most single point mutations are close to neutral, either because the change in DNA sequence does not change the actual amino acid sequence (google genetic code degeneracy), or the amino acid coded for by the mutation is sufficiently similar chemically and biophysically to the wild type aa, or the amino acid in question is simply not very important to the protein's function. A really interesting paper on this came out recently: http://www.ncbi.nlm.nih.gov/pubmed/23041932 They mutated every amino acid in a certain protein to every other amino acid, and characterized the changes in function. Most mutations had little to no effect.

Thirdly, other reasons but I'm tired of this.

2. "Because by the second day of incubation, any cells that have undergone reversion mutations give rise to revertant colonies like rats leaving a sinking ship. Then the ship sinks."

Um...no idea. Those are all sciencey words, yes. Reversion mutations are a real thing. Revertant colonies are a real thing. Incubation is a real thing. But the sentences convey no meaning to me.

3. "EMS recombination"

Not a real thing AFAIK. EMS causes point mutations, not recombination.

4."It created a virus so lethal the subject was dead before he left the table."

No. Maaaaybe they were thinking of DNA methylation, rather than alkylation. Methylation of certain sites on DNA is a very important form of genetic regulation. The virus angle comes in because methylation can silence gene expression, and it appears that one important role of this is silencing viruses that have inserted their DNA into ours (google endogenous retroviruses, my favorite things in the whole world). So, theoretically, a de-methylating agent of some sort could reactivate a dormant provirus, causing Bad Things. Or good things; people are currently trying to use this as a way to cure HIV, by reactivating latent HIV in cells so that anti-HIV drugs can kill it.

5. "Then a repressive protein that blocks the operating cells."

Repressor proteins are a thing, yes. Not sure what they have to do with...whatever the topic is, which I'm not really clear on. Operating cells: no idea.

6. "Wouldn't obstruct replication, but it does give rise to an error in replication so that the newly formed DNA strand carries the mutation and you've got a virus again."

Hrm. Yeah, no clear meaning to me. Not even wrong.

The end.