Reasons why he switched groups for his PhD
"His reasoning for the switch is that he is determined to go to industry after PhD. In his view, an application-focused group makes it easier to publish on high-impact journals due to the higher chance of collaborating with experimental groups. Personally, it's hard for me to understand his decision."
This is what he told you was his reason for the switch, and it was what he was capable of putting into words at the time. The decision to switch groups, and the decision of where to embark on a PhD program (a program which usually constitutes more than 5-10% of a person's entire years of life, and can have significant implications for the remainder of their life) almost always involves more than one factor. Dozens or hundreds of micro-factors play a role in where people land, and these are almost never articulated (he's not even aware of them all). You mentioned his desire to publish in high-impact journals, but surely there's other groups that publish in high-impact journals just as often or more often: Why didn't he go to those places? I can think of several possible reasons.
What requires more skills: theory or applications?
"I think it's not a bold statement to say that it requires more skills to work on theory/methodology than applications, and most people who work on theory/methodology are adequate to do applications as well."
I think that's an extremely bold statement. Okano's comment touches on this. You probably know far more than us about what his former group (which focuses on theory/methodology) does, and what his new group (which focuses on applications) does: The rest of us don't know the names of those groups, and therefore don't know why one would require more skills than the other, but in general there's theory/methodology projects being done successfully at undergrad-only colleges, and there's application projects whose success involves decades of post-PhD expertise (and there's vice versa examples).
What skills do industry groups value?
"Is it true that the industry weighs the "practical values" more than individual skills? Is it true that theory/methodology-focused groups are more suitable for people who want to stay in academia?"
This will depend strongly on the group in industry doing the hiring. You mentioned "high-impact journals", but the vast majority of people working in industry (or academia) do not have papers in high-impact journals like Science, Nature or even PRL or JACS. Industry (and academia) both value "practical skills" and the ability to apply science to achieve practical outcomes. In countries that have enough money, far more academic positions are available for experimentalists than theorists, and publishing application-based papers in high-impact journals is extremely valued in academia (as well as in industry).
People focusing on pure theory/methodology, rarely secure academic positions without making a strong case in their research proposal and interview about the potential practical applications (and it's the papers by the application-focused groups that serve as "validation" that the theorist is doing useful work; if the pure theorist has some such papers in their portfolio, it would be to their benefit). You said "he actually did his master thesis in a well-known group", and it's hard to comment without knowing the group, but academia and industry have both changed a lot since most such groups became well-known.
However, there's groups in industry that may specifically want someone that can help develop theory/methodology. Such job availability might in some cases be even more prevalent in industry than in academia (where money is tight, and mostly funded by tax-payers, and so there's more and more pressure to do things that directly benefit the tax-payers; whereas in industry a billion-dollar company might have the freedom to spend more of their money as they want, without the pressures that exist in academia).