I don't agree; assuming a moving map GPS is being used, the GPS cannot reduce what one knows is "going on around" one, which itself is limited to what can be seen visually.
Even taking the extreme case of the pilot fiddling with knobs head-down, he is going to crash pretty soon doing that.
I've been flying with all sorts of methods for 12 years and have never been in a situation where one knows less about what is going on outside as a result of more information in the cockpit.
What exactly is supposed to be going on outside, anyway? Mid-airs are so extremely rare, even more so when enroute, and given the circumstances of a mid-air (the target being on a constant bearing in 3D, usually) the fact that you may have been looking down for a few seconds is not going to increase the probability of getting one in any meaningful manner. Most midairs happen around airfields anyway (in the circuit, etc). One can be looking down on a map instead - is that somehow "better"?
Flying a wind corrected plog in the WW1 manner is vastly more time consuming (and vastly more error prone) than flying with a GPS, even if the GPS is being used is a well sub-optimal manner. There are people who say it is easy but they are invariably people who are very good at it - because they do it in their local area all day long.