I went through the same decision process a few years ago. I was also convinced by Larry's rationale as elaborated in his book - unfortunately the only bond fund available in my 401k is the PIMCO bond fund (PMBIX), which holds a mix (sort of like total bond fund but with a higher expense ratio). My 401k also has the Vanguard TIPS fund.
So, I ended up splitting my bond allocation between TIPS/Nominal 50/50, and have filled up our IRAs with the Vanguard intermediate treasury fund, and filled up the 401k with the PIMCO and the TIPS, and then bought a muni fund in taxable to get to my full allocation of bonds. In your case, it seems like you'll have a much simpler 2-fund bond portfolio, which is great.
I'm also working on seeing if we can get the treasury fund into the 401k to replace PIMCO.
Every time I read a TIPS thread I start to doubt whether I really want 50/50 TIPS exposure, but I think I will nonetheless just stay the course.
In 30 years we will be able to tell whether treasuries or total bond fund was the right choice. Yes, treasuries backtest better, but as noted above that does not prove anything about the future. Taylor may be right, and I certainly respect his wisdom as well.
Re: laddering vs. fund: for me, the expense ratio (which you can get down to 0.1% in admiral, or $50/year on $50k) is worth paying to not have to deal with purchasing and maintaining a ladder. The more I read about bonds and bond purchasing the more I decide that this is best left for experts - even liquid treasuries. Try logging into the bond purchase screen on Vanguard and you'll see what I mean - it is not for the faint of heart. The fund on the other hand is fire and forget, and much easier to rebalance, etc.
It's interesting that Vanguard is adding international bonds to their target funds. I don't see the need to expose myself to currency risk, as I earn and will retire in the US, so don't see the value in diversifying on that front - again I bought into the argument made by Larry.