I think that is a little over the top, and this is the WSJ.
They quote McChrystal directly many times throughout the piece but somehow this bit is absent quotes and I think they may be mischaracterizing what he actually said. If he actually believes they have gained the upper hand, that would be quite significant, but it seems more likely he said they have gained ground. Later we have this bit.
"It's a very aggressive enemy right now," Gen. McChrystal said in the interview Saturday at his office in a fortified NATO compound in Kabul. "We've got to stop their momentum, stop their initiative. It's hard work."
In an effort to regain the upper hand, Gen. McChrystal said he will redeploy some troops currently in sparsely populated areas to areas with larger concentrations of Afghan civilians, while some of the 4,000 American troops still to arrive will be deployed to Kandahar.
Again with the upper hand, but it's not McChrystal saying it. Seems a bit off to me as all the direct quotes are not that dire sounding. Even if he believed the Talibs were winning it does no good to trumpet that in the media. You acknowledge that they may have made some gains and that you have changed your tactics and strategy to deal with it. I am pinging the Centcom folks to see if that characterization is accurate.