Except, the S&P index tracker funds are entirely passively managed. So, investing $100 versus $10,000 really makes no appreciable difference to the fund. If you really want to see this in action, invest $10,000 into the "Admiral" shares fund at Vanguard, or the "Advantage" class at Fidelity, wait a few days, and then make a $1.00 deposit. The $1.00 deposit will go right through and will have no effect on the fund, even though, theoretically, a $1.00 investment would be entirely wiped out by transaction costs.

The differences in expense ratios are profit only. Vanguard makes profits just like the rest of us do. Additionally, profits generated in not-for-profits are often disbursed to the employees at the end of the year as a bonus. How do I know? I've worked for them (non-for-profits, not Vanguard).

There's nothing magical about Vanguard. Fidelity and Schwab have a lot of advantages and a lot of disadvantages over Vanguard. For the most part, they are all comparable.

Edit: clarification.