That's only counting if you can earn at the rate that your mortgage is. If you earn higher, naturally you'll end up with even more.
But even if you can't, you may still be better paying the dollar in interest to get the 33 cents back, simply because of the opportunity cost of the money you'd use to pay off the mortgage.
I understand the 'invest money at a higher rate of return than your mortgage', but can you explain that last part of still being worth it even if you can't earn a higher or equal rate of return?
Because the math isn't a straightforward comparison, there are other factors.
For example, say your mortgage is 4%, and you can earn 3.75%. If you're getting 1/3 of that mortgage back, you're still coming out ahead even investing at a lower rate, versus paying off the mortgage.
You have to include all factors when you run the numbers, not just "investment rate < mortgage rate, pay off mortgage" (including all the factors would include things like if you take the standard deduction).
Naturally if you're going to just spend that money, it's better to pay off debt. But the cliche you hear all the time in personal finance circles of "it's dumb to pay $1 in interest to the bank to get $0.33 back in taxes" is flat out wrong - lots of times it's well worth it to pay interest to the bank to get part of that back in taxes depending on what you are doing with the money that you would be paying off the mortgage with.
That's my point, that the cliche you hear there isn't correct.
The original question asked was "How would I not be better off not paying the dollar and not getting the 0.33$ back - seems I would be .66$ better off? Honest question what I am I missing? " -- that's what was missing, the opportunity cost of the money.