In a lot of cases OTP will be completely impractical. If instead of a truly random pad you use a pseudo random pad, you will have something a lot more practical. But it is no longer OTP, and the security proofs about OTP means nothing in that case. I think this is the essence of the Bruce Schneier quote you mention.
If we for a moment ignore the impractical aspect of it and assume a setting in which the communicating parties have shared a random key in advance, then why might OTP be considered broken?
First of all OTP is all about confidentiality. A lot of people when they first learn about cryptography think that confidentiality is the most important aspect of cryptography. But in most cases it isn't. Integrity is usually more important. In fact confidentiality without integrity is rarely useful.
So all that provable confidentiality of OTP is useless unless you have provable integrity to go along with it. Luckily Wegman and Carter showed how to do that many years ago. Just like OTP the MAC by Wegman and Carter consumes key bits every time it is used. But the good news is that the MAC only consumes a constant number of bits each time, so much fewer bits are used for the MAC than for OTP which uses as many key bits as the length of the message.
Making it somewhat practical
The combination of OTP and Wegman Carter MAC (or a derivative) is proven secure. But to make it practical one need a source for a long common secret bitstring. I have only ever heard about one way to produce such a key if it wasn't shared among the two parties in advance, and that is through quantum cryptography.
Quantum cryptography does however require an authenticated classical channel. So you cannot bootstrap quantum cryptography without first sharing some secret between the communicating parties. But if you have shared enough key bits for a Wegman Carter MAC, then you can use quantum cryptography to produce a longer shared key for further communication.
The key material produced by quantum cryptography can be used to exchange messages on a classical channel using OTP + Wegman Carter for security. One of course has to save enough bits for the MAC on another round of the quantum communication to refill the pool of key bits.