Oops, that was my misunderstanding in the first paragraph :)
Maybe a clearer example w.r.t. the base^exponent value would be another highly structured class of long passwords, instead of short passwords. For example, those that are just a 2-character sequence repeated 20 times (e.g. abab...ab). You can still say that it'll take maybe up to 26^40 tries for an attacker to guess this, but that number should be more obviously too charitable, since less entropic classes of passwords are more likely to be guessed first.
More generally, this kind of counting analysis depends on your choice of attacker, and it's plausible for attackers to be more sophisticated than just trying all the strings in lexicographical order. A more concrete but still practical attack sketch adapted to the frequency of password schemes today could be: guess dictionary word combinations first, starting with common/short words/phrase lengths, then repeat with small perturbations, then more perturbations, and so on until you search all the remaining strings.
Then, the number of tries for such an attacker to find a 3-word passphrase with a few changes would be much closer to (some small constant) * (# dictionary words)^3 than (# characters)^(string length). Of course, you can still say that such an attacker would take at most (# characters)^(string length) tries to get it, but such an upper bound isn't as useful when the password is much more structured and easy to guess with a slightly more sophisticated attacker.
(Yet another way to put it: one shouldn't expect a password that's 'slightly out of reach' to be significantly more secure than a password that follows a scheme exactly - a more sophisticated attacker would test neighbouring passwords as it brute-forces the combinations in the scheme)