If only one person does this I can call him names and downvote him. If there are two camps and both camps do this, people tribalize and everything goes meta. Then no further actual discussion can take place.
There are no "camps" here. The OP is trying to create a tribe (passive investors are cultish, so this is a very odd comment...I will assume an honest mistake) but that makes no sense on this topic (unless you are selling something, which he is).
The meta of my point is: people try this discussion over and over, it is always wrong, some things in finance are universal (because they have been happening for literally three hundred years).
What you appear to have missed is the part where I said: Burry is not making a "bombastic claim" about what will happen 100% of the time. In my experience, most people think this is what investing is about (the OP is certainly an example). It isn't. I am not making a bombastic claim.
The observation is, again, that: you have a lot of unsophisticated buyers and some non-zero amount of these products are about liquidity transformation. You can have a debate about this all you want but it isn't interesting or engaging to anyone but people who are unsophisticated (not 100% true in this case, Asness is a notable exception but he was an academic and it is mostly academics who take an interest).
My interest is limited to the fact that: it is astonishing how often this happens, and equally astonishing how fervently people will deny that it is happening again (although they are usually new converts).
https://horizonkinetics.com/commentary-type/under-the-hood-i...
But something to note here too: most measures of historical returns do not look at liquidity either. I am in the UK, and I know there is research (I can't find it atm) showing that before 1970s, trading costs were significant. Historical returns rarely reflect that. Nor do they reflect the fact that most people before 1970 probably couldn't own any asset other than govt bonds (or that most banks were forced to own them too).
So I would say the issues with indexes are two-fold. First, they will fail if they are built on illiquid securities (recent example here is also Neil Woodford's implosion). Second, they are often predicated on historical returns that are, in any non-academic/practical sense, fictional.
Another reply is Horizon Kinetics...apart from GMO, they are the only investment manager whose letters I actually read. And on ETFs, they have written a lot.
I am actively disinterested in all the nonsense around population share of active/passive or whatever the Twitterati are bleating about. I have seen enough of these situations to just not care anymore about anything other than the two things I mentioned.