In a way I agree and in a way I disagree.
I agree that no matter how many hundreds of ETFs exist, any retail investor (or someone like me who manages separate accounts for individuals) will only need a handful at the most. I don't really use ETFs like large-cap value or mid-cap growth -- I prefer to get narrower effects. But for folks that do use these types of ETFs, there are a slew of them that get no attention that could be better than the more actively traded ones from iShares.
This chart captures some (I know I left out the iShares Morningstar version) of the mid-cap growth ETFs; we've got two from iShares, one from Rydex and one from PowerShares.
I don 't use any of these, but plenty of people do. I would think that anyone using one of these funds should know the others exist, and if they can get a handle on why PowerShares Dynamic Mid Cap Growth ETF (PWJ) lead the way and form an opinion about whether it continues or not, might want to switch. Well maybe not -- but I think the ability to have some choice is a big positive.
Lastly on this is the ProShares Double Long Mid Cap Growth (NYSEARCA:UKW), which mimics twice the iShares Russell MidCap Growth Index Fund (NYSEARCA:IWP) charted above, the second best performer of the group. Could someone who would put $10,000 into IWP put $5000 into UKW instead, leave $5000 in cash, earn 4% on both as a valid strategy? It is plausible -- even if it is not for you.