I think this has probably been one of the worst times to compared hedge fund performance to other strategies. Let's see if the corrections happen for real and then calculate those returns. After all market was or is at all time high.
The issue, as you imply, is that in a bull market people lose almost all ability to exercise reason and view the opportunity cost of capital as the S&P.
But a lot of hedge funds aren't running high levels of beta, and investors in their funds don't demand that (unf for some hedge funds, who demanded low vol and then went into index funds when beta did well).
And, ofc, most equity hedge funds have had very strong performance. All the Tiger group hedge funds have private companies, everyone owns tech companies, you are even seeing value hedge funds in FAANG stocks...it is quite something.