You make some good points. I might have been too quick to state that 403(b)s only offer distributions in the form of an annuity. Depends on your plan administrator, but historically insurance companies dominated the 403(b) market and it was in their best interest to offer high-fee annuity contracts (since there was no real competition). Maybe the advent of 457(b) plans, implemented by Congress in 1978, brought more competition and forced the insurance companies to offer mutual funds or be slowly squeezed out by the likes of mutual fund giants like Vanguard & Fidelity. There are also big differences between school districts, the plan types and administrators (ex. TIAA-CREF) they offer.

Another key feature of 457(b) plans that I forgot to highlight is:
No 10% federal tax penalty on withdrawals from a 457(b) upon termination or retirement, regardless of age. The 403(b) has a 10% penalty if withdrawn before age 59 1/2 (with a few exceptions).

Regardless of which plan is chosen, it pays to shop around for the plan admin with the greatest investment choices, best returns and lowest fees.