Earlier quoted context omitted.
In theory Nanite is superior to precomputed LODs. In practice it's less clear cut as they aren't going to be as good as artist-created LODs and it's not entirely reasonable to expect them to do so. Also the performance cost is huge as Nanite/virtual geometry is a poor fit for modern GPUs. iirc peak fill rate is 1/4th or something like that as GPU rasterization works on 2x2 quads not per-pixel like shaders do.
Rasterizing very small triangles in hardware is indeed inefficient due to the 2x2 quad tax, but one of Nanites tent-pole features is a software rasterizer which sidesteps that problem entirely. IIRC they said that for a screen entirely filled with triangles roughly the size of a pixel, their software raster ends up being about 3x faster than using the dedicated raster hardware.
The main selling point of Nanite is really just to reduce artist costs by avoiding manual LODs. But a high quality automatic LOD at build time may (read: almost certainly does) strike a much better balance for both current and near future hardware