It also doesn't account for the imputed tax free rent value of living in one's home. That is rather more valuable than the dividends paid.
Imputed income is one of many variables left out here. Tough to say what it's impact (I've usually seen it in the context of renting versus buying) would have been without knowing the buyer's marginal tax bracket and considering dividend and capital gains tax rates during the time period.
Can't say for sure that it would dwarf the impact of dividends.
I also didn't address the capital gains tax hit on selling the residence versus long term capital gains on the stocks, which would help out the after tax return on the house.
In any case, none of this was meant as an either or, but rather to point out that the return on the real estate (or any similar purchase) wasn't all that outrageously high.