Re: Alternative title
NO! This is precisely not what is being described.
The performance problem is due to the buffer-allocation and copying that goes on in the kernel when receiving and transmitting packets via the LAN interface - this applies just as much to "raw" datagrams as to TCP/IP.
There have been a few iterations around a solution, including PF_RING, but the real problem is that the generic Linux approach to device drivers doesn't really work with high-speed network devices. Worth reading up on Netmap for some more concrete details.
The Linux networking stack is, well, sub-optimal, to put it kindly. Getting it all out of kernel space isn't really the answer in the long term, but it does show the kernel developers a way forward.
EDIT: There is, incidentally, the question of whether TCP/IP is even the right protocol suite for this type of application (too small a window size, poor packet loss recovery), but the driver issues are independent of the high layer protocols...