Intercst:
Have you looked at the Monte Carlo methodology used by raddr in the research he has posted to the FIRE board at NoFeeBoards.com and more recently to the raddr-pages.com site? My understanding is that his approach DOES provide for reversion to the mean. Yet his Monte Carlo runs ALSO generate a SWR number far lower than the number set forth in the study you published at RetireEarlyHomePage.com.
Also, I don't think you are right in your suggestion that the concerns re the future being worse than the past raised by William Bernstein relate only to Monte Carlo studies. You say at the bottom of the article you link to that: "Bernstein lists the myriad of non-financial events that could sink your retirement (e.g., political failure causing civil unrest or hyperinflation, military action all the way up to a nuclear bomb, etc.) He puts your chances of surviving this list of calamities at about 80%. It's a waste of time and resources to attempt to plan your financial affairs for a higher probability of success." All of the factors that Bernstein lists apply to BOTH conventional studies AND to Monte Carlo studies. Your 4 percent number may well not work if there is a nuclear war.
Bernstein is saying that there is NO withdrawal rate that provides greater than 80 percent safety. This means that your "100 percent safe" number (4 percent) is really only 80 percent safe. Raddr's work (and JWR1945's work too, and also Bernstein's work described in his "Four Pillars" book) says that even this 80 percent safety claim is an overstatement. Raddr and the others are saying that 4 percent is not even 80 percent safe, that to get to 80 percent safe at today's valuation levels, you need to go with a lower take-out number or a portfolio allocation of something other than 74 percent S&P stocks.
I don't hear Bernstein as saying that it is a "waste of time" to calculate the numbers accuraely. He is saying that even if you calculate them with great precision you cannot get to a number providing better than 80 percent safety.