It was always higher performance than e.g. Pascal or Basic on any relevant platform (the cost was lack of error checking, e.g. array bounds).
And it was slower than FORTRAN on most 32-but platforms such as DEC, Sun and IBM Unix workstations, VAXen and mainframes - but it was still the speed king on the most prevalent platform of the time, 8086/80286 and friends.
Only as urban myth scattered around by the C crowd.
As user from all Borland product until they changed to Inprise, it was definitely not the case. Pascal and Basic compilers provided enough customization points.
When one of them wasn't fast enough versus Assembly, none of them were.
I used to have fun showing C dudes in demoscene parties how to optimize code.
Now, if you are speaking about the dying days of MS-DOS, when everyone was jumping into 32 bit extenders with Watcom C++, then we are already in another chapter of 16 bit compiler history.
I used TP from 3.0 to 7.0 and a little bit of Delphi 1, and contemporary Turbo C; I dropped to assembly often, dropped TP bound checking often, and was well aware of all these controls.
Parsing with a *ptr++ in TC was not matched by TP until IIRC v7; 16 bit watcom often produced way better code than either TP or TC.
And, as you say, indeed when speed was really needed, you dropped to assembly; no compiler at the time would properly generate “lodsb” inside a loop, although watcom did in its late win3 target days IIRC.
I cannot say I ever bother to benchmark parsing algorithms across languages in MS-DOS, so maybe that was a case where Turbo C might have won a couple of micro-benchmarks.
That was just an example. In general, properly written TP code (properly configured) was on par with properly written TC code, and both were slower than properly written Watcom code in my experience - I did them all and switched frequently.
Parsing was one example where C shone above Pascal, and there were others. My experience was Watcom was consistently better, but in general C was sometimes easier/faster, Pascal was rarely easier/faster, and if speed mattered ASM was the only way.
During 8 bit days, all games that mattered were written in Assembly.
During the 16 bit days, Pascal, Basic, C, Modula-2, AMOS were the "Unity" of early 90's game developers, with serious games still being written in Assembly.
The switch to C occurred much later at the end of MS-DOS lifetime, when 386 and 486 were widespread enough, thanks success like Doom and Abrash books.
Easy to check from pouet, hugi, breakout, Assembly or GDC postmortem archives.
The person you replied to said that C was the language of choice for speed and not rivaled by pascal or basic. What games were written in pascal or basic and known to be competitive with other high end games of the time?
Only with people willing to challenge the status quo do we move forward.