I agree. However, step 1 (mentioned in your post) is necessary only until you are able to build an investible surplus large enough for the returns from investments to take care of your expenses for the rest of your life. In fact, for some people, step 1 can totally be skipped (think, wealthy parents who can gift their child a large corpus).
In my case the numbers work out as follows
My expenses are 15 lakhs a year and I assume it will increase every year based on inflation. Assuming an average inflation of 6% and the ability to generate an average return of 10%, I would need an investible surplus of 3.75 crores to reach the point where I can retire and live off the returns from my equity investments. Now, instead of 10%, if my portfolio is able to generate an average returns of 11% (assuming the same inflation of 6%), I would need a corpus of 3 crores (instead of 3.75 crores).
Having invested in equities for more than 15 years now, I believe achieving a real return of 5% is NOT difficult. However, if there is a black swan event (world war 3, great depression etc), the above calculations could become meaningless which is why it would be a good idea to own a house, have no debt and build a war chest of 2 times your annual expenses (invested in liquid funds or FDs), before considering quiting your job.