I also bought my first dell lcd 8 years ago. And you're right, I remember having some troubles when gaming. I don't know though that it was all due to the change in input lag. Everyone made a huge deal about that at the time, and while I admit that you will end up in situations where 1/40th of a second is the difference between life or death, I don't think that it's often enough to really cause a noticeable drop in k/d ratio.
Many people were trying to drive much higher resolution screens with the same hardware leading to a lower frame rate. Those LCDs were awesome at the time, but they had horrible pixel response and contrast. People were dealing with screen tear and other issue that all meant you had to work harder to interpret what you were seeing.
I just think there's more to the story then simply 25ms of lag completely destroying your gaming ability. Think about how tiny of an amount of time 25ms really is. I'm not saying it's not noticeable, but even with how often FPS games put you in situations requiring fast response, i doubt that 25ms often is the difference between life or death.
Does it all add up though? sure, and if I were a way more hardcore gamer then I am now I'd do absolutely everything I could to minimize sources of lag. But for 99% of users I doubt the lag is what is holding them back while gaming. And not to mention the other factors, like that the better the PQ the faster you'll react. For instance, I got to play on a friend's setup running a 120fps display. I loved how for fast paced first person shooters the added frames and detail made a difference. When making rapid camera movements you could actually make out detail that would normal be blurred a bit at 60fps. The difference in feel had nothing to do with input lag.
While I still put an emphasis on I out latency I really like your point about higher frame rates = more information. It's exactly the point I was trying to make about 4k a few posts earlier. More resolution isn't the only answer: higher frame rates help to bring more information to our eyes are as just as important-- if not more-- than resolution is when quantifying WHAT we see. I think this goes for games as well as shows and movies.