The analysis that I did was for the real world situation. I didn't use 1/8" dowels because chair manufacturers use 3/8" dowels. And if you want to use dowels that would have approximately the same long-grain-to-long-grain surface area as the loose tenons that I calculated, you'd have to use about 9/16" dowels. The problem with using dowels that large is that it would take up a lot of a 3/4" thick piece of wood. 3/4 (or 12/16) minus 9/16 gives 3/16. That has to be divided in two because you're going to center the dowel. That leaves 3/32" on each side of the dowel which is pretty weak.
No, dowels are not as strong as a good mortise and tenon joint, even if it's a loose tenon. No matter how you look at it - from the mathematics or from experience with failed chair joints - it always comes out with the same answer.
Mike
[And, of course, my analysis is all about surface area.]
[One more thing: A dowel with the same surface area as a tenon does not have greater shear strength. It may have greater torsion (twisting) strength.]