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How important is a better optimizer?

A remarkable study by Markowitz and Usmen (2003) addressed the question of whether better inputs are more important than using the RE optimizer.  They invented a sophisticated procedure for improving investment information in a given set of data then compared their performance with a MV optimizer relative to unimproved risk-return estimates with RE optimization.  The RE optimized portfolios outperformed the traditional optimization with better inputs. 

When announced, their results surprised many.  However, in hindsight it is easy to explain their results.  MV optimization always overuses the information in any set of realistic risk-return estimates resulting in portfolios that are unlikely to have much investment value whatever the quality of the inputs.  While such tests are important, they are largely of academic interest.  Investing should consist of useful risk-return estimates and an investment effective RE optimizer.