Essnetially (and i'm really boiling it down here) he argues two main points and connects them to form that conclusion: First, that the wider phenomenon clearly shows evidence of being a tangible thing with highly varied but in certain ways similar physical manifestations across an enormous span of human history. This is a thing which weakens the probability of it merely being iconography based on individual psychology or myth making.

Secondly, this being the case, those widespread, long-running physical manifestations indicate something more subtle than mere UFO visits that only began during recent history.

Ergo, we're looking at something external, at least partially physical and because it has affected our belief systems and legends, and thus quite possibly a sort of control system. (This last one is a bit more of a leap but the first two main arguments are covered fairly well in his books).