I think that Knaight is arguing mechanics, whereas Cespenar is arguing results. System does matter, but so do the players. The problem with a purely "system matters" approach is that in discarding the (pointlessly disparaging) idea that "you aren't getting the results you want because you just aren't a good enough gamer" it also can tend to toss out the fact that how the players approach the game definitely does affect the outcome. Most system-matters games seem to approach this by punishing the "wrong" play style (usually indirectly). Which is fine as far as it goes - they're also (IME pretty universally) pretty upfront about what they're trying to do. The usual stumbling point will be players who are used to reading any instructions on how to use a game system as vague suggestions at best.

3.5 (or whatever edition) D&D is actually far more useful for some players in running a story-based game (whether this is narativism or not I don't really know; g/n/s tends to break down when you're talking about actual systems / actual play) in that they do not want the system to have much direct impact on how they tell the story. I think this group seems to be diminishing, so perhaps that was simply a reaction to dealing with the desire for that type of game before there where systems that really handled it, mechanically.

Anyway, back around to the OP, I think that while I agree with Cespenar that you can get the results you're looking for from 3.5, the willingness not just to accept rules tweaks, but to try a different mode of play at all, seems absent from these players (AFAICT). Just as the simplest example that I can come up with - awarding "story XP" doesn't help if the players are willing to forgo that XP because they find story stuff too much of a chore to bother with.

The basic issue is that we game to have fun, and XP, FATE points, or whatever are strictly secondary (or at least should be - I have encountered players who have stuck it out with games they just weren't having fun with; heck, I've been that player once or twice...). No system is actually "sprinkled with magical pixie dust" to the extent that it actually produces great results regardless of the players.