The VED is only a small component of car ownership that people focus on too closely quite often, there was a time when the 2.8 V6 Aero was the cheapest Saab to buy as people were put off by fuel and VED costs... which meant you could buy a V6 Turbo for around £4k as a trader and the equivalent diesel was £8k... £4000 buys you a hell of a lot of fuel and VED and given most people would only keep a car for 4 or 5 years it would cover the difference.
As was already mentioned in this thread, we had a woman come to us wanting a Saab and wanting to save money. At the time we talked to her she only drove a couple of thousand miles a year so wanted to "save money" - her typical journey was 3 miles on country roads to a train station where she'd park and 3 miles home again. I suggested she got a V6 petrol as fuel costs weren't really an issue and they were much cheaper to buy, she said that the VED was too much, petrol costs too much and she wanted a diesel, we pointed out that on short journeys a diesel really didn't make sense but she wouldn't hear it. We actually refused to sell her a diesel as we didn't want to stand the warranty on a car used like that due to the 1.9 and it's EGR+DPF problems. She went elsewhere and got herself a diesel, 3 months later she brought it to us as she was cold when driving to the station in winter as it never got hot and then a year after that it needed a large amount spent on EGR related problems and other general diesel problems, she then said "I thought a diesel would be cheaper"...
Also, the annual service on a diesel is about 20% more expensive than the equivalent petrol model and the 1.9 had crusty wiring looms 10 years ago but the petrol models seemed to be pretty solid. I just think that without there being some significant saving somewhere it doesn't make sense.