I'm not sure why we think lower ranks are somehow 'better'?
It's probably a political statement on one level or another. Accepting it's a bit of a sweeping generalisation, I'd wager most people that peddle this argument of cheaper is better either have a sense of entitlement (it's my taxes funding this and I want to pay as little as possible, hang the consequences, they are irrelevant to me) and therefore feel their opinion is automatically correct and should be adopted as policy regardless of the facts. Or they are in a civilian organisation that isn't doing particularly well and having been on the receiving end of cuts and freezes to stay afloat and thinks the public sector is bloated and ripe for plucking.
It's funny how none you rarely heard these claims of cheaper is better when the economy was booming and the civilian sectors were rolling in cash whilst the military scraped by.
But you are correct that rank doesn't necessarily equate to better. I can't remember where I heard it, it may even have been a movie, a VSO dressing down another officer and using the line I'm your superior officer, to which came the reply higher ranking yes, superior no
