Toonces,
I agree that choosing Hi pair over a 3 card royal will cost you money. I also agree that holding 2 hi cards over SF3i, 0 hi cards will cost you money. What I wanted to make clear is that the reason people would choose RF3 over Hi pair ( in fact , the only reason ) is for that 1 in 1081 chance at the royal. When you do that, you are in fact paying for the privilege of drawing to the royal and most of the time, you will miss. But the long expected value of the play is the number of hands times the difference in EVs of the hands. The $1000 Royal is the whole reason you are making that play so you have to include the Royal Flush contribution to the decision making process. You are giving up EV to increase volatility.