agalkin - I believe what Govoni is saying, is all else being equal (you have two index fund in the same sector and basically the same composition), obviously he one with lower cost is going to produce better returns over time. I buy my 16 ounce bags of almond M&M's at the grocery store and pay $2 for one bag a week. You on the other hand, buy your one bag of 16 ounce almond M&M's from the corner deli and pay $3 a bag. Over time, who is going to be saving more money on his M&M purchases? Again - the funds Govoni is proposing are very similar in nature.
Now, I fully agree with your analogy and what you were pointing out - I even had a lengthy reply, until I saw Govoni's prior post. The car analogy is fine by me - like fees and the funds (where the funds are not necessarily so much the same). Depending on your investment objective, it may be well worth it to pay higher fees for a particular fund. Similarly, if I just need a beat up old car to get me from home to the train each morning a used Hyundai may do - but, that is a different objective than needing a Jaguar to impress my clients who I entertain often as the president of a very visible company. Or maybe my objective is to have a reliable car, excellent gas mileage and a bumper to bumper warranty. Again, a different objective which requires different considerations.