This is a passage from an article on the origin of the idiom basket case.
The origins of this idiom are somewhat grisly. In World War I, there were cases reported which involved soldiers who lost both their arms and legs in battle. Any soldier in such a condition would be especially helpless, and other soldiers dubbed them "basket cases" in reference to the fact that they would have to be carried around by others. As such, the original origins of the phrase caused it to invoke physical helplessness.
As such is defined on Dictionary.com as:
a. as being what is indicated; in that capacity: An officer of the law, as such, is entitled to respect.
b. in itself or in themselves: The position, as such, does not appeal to him, but the salary is a lure.
I have a feeling that as such in this context means definition a from above? and I'm guessing indicate in definition a means to state or express, especially briefly or in a general way? But what about in that capacity? If capacity means position; function; role, then I'm guessing this part of definition a does not apply?