I agree with everything that's been said, but I add my hop pellets directly to the primary without using a sack. All-grain can be cheaper as long as you don't go crazy with fancy equipment. My first mash tun cost me $6. A friend found a 10 gallon Igloo cooler at a flea market for $1 and I spent $5 on a plastic ball valve and made my own false bottom with cheap plumbing supplies. I've since "upgraded" to a SS bulkhead/ball valve and bazooka screen but I figure after brewing a few times a month the cost has spread out. Also, I look at it as a hobby, not necessarily a way to save money. If you want to go all grain on the cheap refer to Denny Conn's website www.dennybrew.com
and try to find a cooler at garage sales, flea markets, Craigslist, etc.
Oh, and to respond to the employee at the LHBS, yes you can make better wort than the brewers that make the malt extracts.