Yes, the OneWire library used to be incompatible with the chipKIT MPIDE IDE.
Just remove OneWire from step1.mk file.
New place for excluding libraries is the makefile file:
# List the libraries to be excluded
# For example, WiFi may crash on Arduino 1.0.2
# For example, Esplora may crash on Arduino 1.0.3
# For example, Firmata may crash on Teensy 3.0
# For example, OneWire may crash on MPIDE 0023
#
EXCLUDE_LIBS = Firmata WiFi Esplora OneWire
The template has been updated accordingly.