That said, whenever I read of active management pros criticizing passive investment, I can't help but think at least some of the insight is conflicted.
In general, yes. However, Klarman is an 'active manager' only in that he does not index. He creates value by long term value investing and is in a very real sense the direct inheritor of Graham and Buffet. His genius lies in an aptitude for identifying distressed securities that are undervalued through extremely through investigation of a business's operations. When we finds one where the potential losses are suitably hedged, he buys and holds for as long as it takes for a gain to be realized (this may be 3 years and it may be 20).
Obviously, 99% of people do not have the aptitude or opportunity to run a business like Klarman but, it's not fair to lump in him with all the active management fee sharks who fleece their customers with constant stock churn.
I thought a Total Stock Market Index fund invested in all publicly trades stocks.
"The fund invests by sampling the index, meaning that it holds a broadly diversified collection of securities that, in the aggregate, approximates the full index in terms of key characteristics." - This is directly from the VTSAX info page. Every index fund is an approximation.
Moreover, Klarman doesn't differentiate between total stock funds and "exchange traded funds (E.T.F.s) that mimic various market or sector indices.” so it's not clear how much he thinks sector indices are muddling the issue.