I haven't checked with this version of VLC, but can it do hardware h264 inside an MKV container ? That's where some players have put in a lot of work to hardware decode MKV (when it's h264) as iOS requires some crazy workarounds in that area. So if VLC is doing MKV in software, it's still going to appear slower to the user.
Also, I'd say Open Source isn't really a relevant feature on the app store.