To convert my comments to an answer:
I will assume that your normed division algebra $K$ is real and finite-dimensional. I am nearly sure that Baez assumes both.
Lemma. Let $V$ be a finite-dimensional real normed vector space. Suppose that the subgroup $G$ of linear isometries of $K$ acts transitively on the unit sphere of the norm on $V$. Then the norm on $V$ comes from an inner product.
Proof. Let $B$ denote the (closed) unit ball of the norm of $V$. Then $B$, as any compact convex solid in $V$, admits the Jones ellipsoid which is the unique least volume ellipsoid containing $B$. (A formal definition of a closed ellipsoid is that it is the unit ball of a norm given by an inner product.) By the uniqueness of $E$, the group $G$ preserves $E$. But then $G$ also preserves the (nonempty) set of points where the boundaries of $B$ and $E$ meet. By the transitivity assumption, it then follows that $\partial B=\partial E$, i.e. $B=E$. Hence, $B$ comes from an inner product. qed
Edit. According to the survey by Pelczynski and Bessaga,
Some aspects of the present theory of Banach spaces, page 255,
the above lemma is a result due to Auerbach and von Neumann (independently). At the same time, according to the same source, if $\mu$ is a non-sigma-finite non-atomic measure, then for each $p\in [1,\infty)$, the Banach space $V=L^p(\mu)$ has the property that the group of linear isometries acts transitively on the unit sphere. (I did not check this.) In this example, the Banach space $V$ is not a Hilbert space. It is an open problem, due to Banach and Mazur if every separable Banach space whose group of linear isometries acts transitively on the unit sphere is necessarily a Hilbert space.