Are there ANY benefits at all that come from this 401(k) other than the tax-deferred status of the investments? Profit-sharing contributions, maybe?
You have two options that I see. The financially smartest move is to just invest anyway, but it only works in your favor because you plan to move on in 3 years.
If you want to do the "right" thing, I would suggest you stay out and heavily lobby your company to change (you not participating makes your position look better). Since that Frontline story was done on high 401(k) fees earlier this year there have been some resources shared on the Internet with suggestions for how to do this effectively. Start with
http://www.obliviousinvestor.com/whats-involved-in-switching-401k-providers/ and
http://www.obliviousinvestor.com/getting-changes-in-your-401k/).
From my own experience with this, I suspect part of your company's problem may be a lack of sufficient assets in the 401(k) plan. I've been told that it's hard to find low-cost 401(k) providers if your plan has less than $1M in assets. If that's the case, you might be able to make a financial argument that better investing options or a match will increase participation (this is where you not participating comes in, you're anecdote #1; but find more), which increases plan assets, and in turn helps the plan lower its costs.
Of course, you'd have to tie it all back to a 401(k) being a benefit that helps attract and retain talented employees. As you're starting to hear in this thread, a crummy 401(k) only benefits employees who are going to stay for a couple years then leave. It penalizes loyalty because the high costs compound over time, and as long as you're an employee you can't take your money out without some kind of penalty. Also take a look on the Internet (sites such as Glassdoor) and find out if your company's terrible 401(k) is public knowledge. If it is, you can use that.