Suppose there was a world, called Passiva, where only passive index investors existed. They buy fragments of the entire stockmarket based on whatever funds they have left over during accumulation phase and sell off during their early retirement phase. Price of the stock is based solely on the supply and demand from the passive investors, so those that get their money in when most people are retired tend to get a bargain deal, while those that get money in while more people are getting money in are getting the stick. There are bigger winners and losers, because in the end, it's a zero-sum game.
In such a world, a contrarian strategy would crush the passive investors, as it would be easy to play the markets for a higher return. Even better if you could pick single stocks that have a better underlying business model, more fit to survive and start differentiating on price. The transaction costs would be a small price to pay in such a game-theoretically world ripe for the slaughter.
In an opposite world, with a thriving active trading community, the passive strategy would beat or match the sum of all active strategies, because you cut out the transaction costs.
This all suggests there is an equilibrium between active and passive. If a market is too active (which I would say, our markets are) then passive will beat active. If it is too passive, then active will beat passive. If they are at their equilibrium point, then results will be about equal. My guesstimate is you would need about 80% passive for active to start beating passive in general. But that is really on gut feeling - if 20% of the market would respond to news, information, and be able to play the supply demand game, then the passive strategy would start to fail from my point of view. But it would probably still not fail massively.