1

Source: pp 15-16, What Does It All Mean? A Very Short Introduction to Philosophy (1987) by Prof. Thomas Nagel.
Sorry for the long quote; please advise me if and how I can shorten it.

  There is another very different response to the problem. Some would argue that radical skepticism of the kind I have been talking about is meaningless, because the idea of an external reality that no one could ever discover is meaningless. The argument is that a dream, for instance, has to be something from which you can wake up to discover that you have been asleep; a hallucination has to be something which others (or you later) can see is not really there. Impressions and appearances that do not correspond to reality must be contrasted with others that do correspond to reality, or else the contrast between appearance and reality is meaningless.
  According to this view, the idea of a dream from which you can never wake up is not the idea of a dream at all: it is the idea of reality - the real world in which you live. Our idea of the things that exist is just our idea of what we can observe. (This view is sometimes called verificationism.) Sometimes our observations are mistaken, but that means they can be corrected by other observations -- as when you wake up from a dream or discover that what you thought was a snake was just a shadow on the grass. But without some possibility of a correct view of how things are (either yours or someone else's), the thought that your impressions of the world are not true is meaningless.
  If this is right, then the skeptic is kidding himself if he thinks he can imagine that the only thing that exists is his own mind. He is kidding himself, because it couldn't be true that the physical world doesn't really exist, unless somebody could observe that it doesn't exist. And what the skeptic is trying to imagine is precisely that there is no one to observe that or anything else -- except of course the skeptic himself, and all he can observe is the inside of his own mind. So solipsism is meaningless. It tries to subtract the external world from the totality of my impressions; but it fails, because if the external world is subtracted, they stop being mere impressions, and become instead perceptions of reality.
  Is this argument against solipsism and skepticism any good?
[1.] Not unless reality can be defined as what we can observe.

Please correct me if I erred, but here is how I understand 1:

  1. No, this argument is NOT good, unless reality [...] observe.

If so, then I do not understand how Nagel arrives at or concludes 2.
Why is 2 a necessary premise? To what exactly?

1

Statement: "Some would argue that radical skepticism of the kind I have been talking about is meaningless."

Conclusion: "2. No, this argument is NOT good, unless reality [can be defined as what we can] observe."

Elaboration: Reality is not defined as what we can observe and radical skepticism is not meaningless. Observations can be misleading and different interpretations from observations of the same thing lead to the conclusion that the underlying reality has not been discovered.

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