It's not related to slow speed. That curve is probably always there, for that generation of processors. Modern processors clocked slower is a different matter, those are basically already underclocked.
I think the whole race-to-idle thing is overrated. It might be true if you look at servers or something, or when you are waiting for something to finish before doing anything else, but in general it seems just running at lower cpu speed (and voltage) uses less power. Especially with laptops it's not just the cpu, the screen and other things take a lot of energy as well, and those are on no matter what.
For my Thinkpad X40 with 1.4GHz Pentium M the numbers are (CPU undervoltaged with PHC patch, otherwise plain kernel), more or less, network cable plugged and LCD at usable brightness:
10W idle, 16W max cpu speed (20W without undervoltage), and 12W for fixed 600MHz 100% cpu usage.
4W more power draw for 2.3 "speedup" seems like a good deal, until you realize that what you're doing isn't cpu limited and that you use the thing for something all the time anyway (I call it "reading"/"staring").
So for one hour of 100% cpu usage at 600MHz the total power usage is:
1h * 12W = 12Wh.
For the same task done with race to idle it is:
t = 1/2.3h
t * 16W + (1 - t) * 10W = 12.6Wh
Which at best proves that it doesn't matter much. Without undervoltage the numbers aren't as good though:
1h * 13W = 13Wh
t * 20W + (1 - t) * 10W = 14.3Wh
which results in 10% less battery life, or about half an hour.
Throw in the more heat and fan noise, and I'm happy if it stays at 600MHz for cpu intesive tasks taking a while. That said, the default cpufreq does the right thing and puts the cpu at 600MHz speed almost all the time anyway.
Of course that it all doesn't matter all that much may prove that the race-to-idle exists, so you can interpret the results to your liking. But claiming that doing it one way is substantially better than doing it another way seems far fetched. Perhaps the thruth is somewhere in the middle, with best results with cpufreq with a max speed of 1GHz for this setup.
FWIW, the minimum idle power usage is about 6W for this laptop, with everything more or less off or idle/unplugged. That seems way too much for doing nothing (suspend to ram is about 1W, in a perfect world total idle should be about the same, with suspend case using even less energy of course). Oh well.