The problem with lag isn't ship detail or such bullshit, it's having to track thousands of units at once.
FYI, each ship's model is parsed per vertex through the script to display correctly in-game. Less vertices = less load time. So without a LOD scaling factor, you're loading more verts on screen when the game is "having to track thousands of units at once." So yes, it does have to deal with ship detail. That's what the .MESH file is for, loading and containing every vertices for one particular ship and rendering them in real time on the map.
Well, you can tell lavo that, according to you, he wasted around 8-10 hours of his time. Or, you can be thankful of the work he did for us, and without anything in return.
My opinion on Rebellion has nothing to do with what Lavo has done, it's merely discontent with how Rebellion operates for a game of its stature. Please learn to read. Almost all modern day games have some form of LOD scaling, I don't know why Rebellion and Sins don't.