In the example I gave above, the value of the fund in a year is still $102 (independent of whether they hold the bonds to maturity or whether they sell at the fair market value and reinvest at the higher rate). In your example, buying and holding a treasury would only be better than VGSH if the market on average underestimated the future interest rate over that time period (so that as VGSH rolled (i.e. liquidated and reinvested) its bonds at an average rate of less than 2%). This has less to do with holding vs liquidating than it has to do with fair pricing of the interest rate. The main difference between holding to maturity and rolling the bonds is this: if you hold to maturity you make a single large bet on the interest rate; if you roll your bonds, you make several smaller bets on the interest rate.
Yes, as you say, holding a bond instead of rolling it can lead to a different return (when the market expectation of the future rate is wrong). But for most people this is irrelevant, as they won't be better at valuing interest rates than the rest of the market.
If you disagree with the market pricing of interest rates, then yes, you should do something other than the market (i.e. what the bond fund would do). Letting the ladder burn down (as opposed to continuing to roll, as the fund would) is claiming that the rates will be higher than the market is currently pricing them.
If you agree with the market pricing of bonds, then the ladder is equivalent to the bond fund (because the bond fund is simply managing the ladder for you by proxy).