I take the point that small changes can produce big improvements in ranking but I think that depends on whether the page or site is being promoted or demoted by parts of the algo (e.g. Panda).
A heavily Panda demoted site needs to optimised to the eyeballs to achieve ranking improvements a site boosted by Panda can achieve with a simple one word change.
If the foundations are shaky they need to be fixed first. Then the SEO bit is much easier.
The problem with improving for the algo based on observations about other pages that rank higher is hidden elements like trust and quality can produce great rankings for average pages, so if you make your pages like your competitors and your trust or site quality is lower, you could be shooting yourself in the foot.