A Cyborg can be both what Phillip K. Dick said, AND it could be a race of badass man-machines as well. Words can have different meanings.
As a race we're not completely non-cybernetic. If you don't have an artificial limb of some sort, you are at least taking medicines that are derived from synthetic sources, wearing bluetooth headsets, or hearing aids or glasses that encance your otherwise diminished natural abilities, and doing things that would otherwise be natural like building your muscles and going for walks with the aid of weight lifting machines and treadmills. I've yet to even mention your iPod, your computer, or your car. Our well being, nevermind our survival, is becoming increasingly more dependent on machines to the point where a person can merely be defined as something that operates a machine, which I think explains Dick's thought process when he came up with the definition.
There is a flaw in the way Dick phrases his definition though. He is claiming that since we create the machines, that makes us cyborgs. Actually, that's the process that makes us human beings because, as far as I can tell, we're the only animal that can make a tool more complex than a piece of grass we can stick in a termite hill.