MPEG-2 is horribly inefficient by today’s standards
Not as true as you might think. At low bitrates yes of course. But at bluray level bitrates the difference isn’t so big.
Meaning a 5 gb mpg2 feature will pale in comparison to a 5 gb h264 feature, but a 22 gb mpg2 compared to h264 the difference wouldn’t be quite so apparent.
So yes I guess by definition that does make h264 more efficient, but when you’re talking a Blu ray sized file it doesn’t make a huge difference. I’ve authored a few Blu rays using mpg2 and they look fine even projected into a 120 inch screen as long as the average bitrate is a minimum of about 20 mbps, max at about 30.