Kim,
While I don't know everything about dispinsationalism, that quote definitely has the perspective of an individual who has an Israel-centered hermeneutic to the Bible. Israel was God's "chosen nation", but not everyone was chosen to be saved within the nation. This is used by some to find a middle-ground in the doctrine of election (a person may be chosen by God, but that does not guarantee salvation for the individual).
(I'm not trying to bash dispinsationalism or any dispies out there, I'm just giving my
on the quote.)