I'd say that a Group III oil with a "optimized" additive package can perform at least as well as a PAO. In particular the oil analysis results I've seen with the 5w-40 imported Castrol Syntec and Amsoil XL Series oils are very good. The 5w-40, HDEO's made with GP III stocks also perform very well - particularly in diesel engines.
The one area where the PAO's are clearly superior is in extended drain use. I've seen very few Group III based synthetics - including the Amsoil XL stuff - that will consistently last more than 12,000 miles. I've seen very few 5w-40, Group III based HDEO's that will last more than 50,000 miles in OTR trucks; compared to 125,000+ miles for Amsoil and Delvac 1.
Even the best (XHVI - slackwax feedstock), Group III basestocks require more stabilization with additives. Specifically they require "pour point depressants" to achieve the 5w grades and they all require higher concentrations of oxidation inhibitors to stabilize them at very high temps. All the 0w-xx oils you see require some PAO to achieve the required low temp viscometrics. Group III stocks also require higher levels of VI modifiers to achieve a given SAE grade. This is why the GP III based 5w-40's shear badly in turbocharged gas engines....The "narrow range" 5w-20/10w-30/10w-40 Group III oils are probably your best best in this base stock class.
The price of group III basestocks to blenders like Amsoil,Castrol, Royal Purple, Redline, etc is only about fifty cents a quart less than PAO basestocks. So it is unrealistic to expect Group III based synthetics with robust additive packages to be priced < $4.00/quart....
I would not recommend using Group III based oils for any turbocharged engine, based on some of the SAE papers I've downloaded and reviewed. They simply do not perform as well with regards to high temp piston deposits and ring sticking - particularly in TDI diesels. However for non-turbocharged gas/diesel engines they can represent a good value at the $5.00/quart price point ...
Tooslick