Well, pb4 beat me to it, but I'll post my example as well, since I took the time to write it.
...So what if I pay a lower tax rate today, if I have foregone investment returns to do it?...
No. You do not forego any investment returns to pay the lower tax today. You just haven't really thought this through yet.
You have to start by accepting the fact that you don't own all of your tIRA. Embedded in your tIRA is a tax liability that grows in lock-step with the taxable funds that could be used to pay tax in a conversion. IOW, when you continue to defer, the embedded tax liability continues to grow by the same amount as your would-be tax dollars on a conversion. When you convert, it's really just like paying off a liability early in the hope that the liability will be less today than in the future (due to tax rate differences).
But enough words. Here's an example:
Assume: tIRA of $10K, taxable account of $1.2K, tax rate 12% now and 12% later, rate of return 7%, and 15-year timeframe.
If converted, obviously the tIRA and taxable go to zero, and the Roth of $10K grows to $27.6K at 7% over 15 years.
If NOT converted, the tIRA grows to $27.6K and the taxable account grows to $3.3K, which is exactly how much is needed to pay tax on the $27.6K tIRA. Net after-tax proceeds are exactly the same as the convert scenario.
Basically, the investment returns on the taxable account were negated by the growth in the embedded tax liability in your tIRA. The investment returns that you actually OWN, on the Roth or the after-tax tIRA, are exactly the same.
Now, if you assume the tax rate is 12% now and 22% later, the convert scenario wins easily. In actuality, the convert scenario wins even when the tax rates are the same. In the convert scenario above, the $1.2K taxable balance was, in effect, "transferred" tax-free into the Roth. No tax will ever be due on the $1.2K going forward. In the no-convert scenario, the taxable account grows to $3.3K and will inevitably have some tax due over that period of time. So the real after-tax value of the no-convert scenario is less than $27.6K, but this is negligible compared to the effect of tax rate differences.