Vanguard Target funds are nothing but a collection of passively managed index funds. The ER is slightly higher than doing it a la carte, but it re-balances without having to worry about it.
it is only higher if you qualify for admiral shares in all the funds contained in the target fund. With the current case of most target funds having a 2% holding in International Bonds, you would need to have $500,000 invested to make it cheaper to buy the individual funds.
Yes, Vanguard is a lot better than others in this regard, that is true. But the fees are still higher. Automatic re-balancing is nice, but it's not like balancing a portfolio is anything to "worry about" once you figure out the basics (which you should).
There's also the fact that not everyone's 401k is offered through Vanguard. For example, if you're stuck with Fidelity like I am, then you will definitely need to avoid their mutual funds and choose their index funds instead. (With 401k, you cannot pick a fund outside of the broker that manages it.)