It would seem like one would prioritize savings, but due to the variance in interest, the net gain is in favor of paying off high interest loans vs building low interest savings.
Still, from a practical standpoint, you shouldn't put ALL of your disposable income towards debt, as you will want some sort of emergency fund to keep you afloat when your car breaks down. Otherwise, you go rely on more debt. Spending saved money is cheaper than spending borrowed money.
And my car did just break down hard enough for it to be junked.
Of course, there are lots of complications to this general rule in the real world. The US, at least, taxes the returns on your savings (capital gains and dividends) and gives you tax benefits for your debt. When saving in a 401k, employers often match your contribution, which amounts to a guaranteed 100% return on your investment for the portion that's matched.
Liquidity is also a concern. For example, if you have a 30-year mortgage on your house at 5%, you probably wouldn't want to put all of your savings into paying down that mortgage since you can't get it out again until you sell your house. If you have a sudden need to raise cash, you'd need to get a home equity loan, which can be tricky if your house value has plummeted or if interest rates are high.
Thus the full answer is that, well, it depends on a lot of life factors, and although paying off your debts is generally good advice, especially for very high interest loans like credit cards, there are many factors to consider other than the spread between the return on your savings and the interest rate on your debt.
Sorry, but you're wrong. Your retirement savings should go into relatively high risk investments with good long term average returns, such as the stock market. At this point the average return on investment for retirement savings exceeds the interest rates on your loans, and therefore the net gain is for preparing for retirement. (Unless, of course, you're facing a short term cash crunch where long term returns become irrelevant to your utility.)