@Goredho didn't describe his investment and retirement horizon. If he's at or near retirement the value as a portfolio diviersifier is exactly as I just described, so I'm not quite sure what's not clear. If he's far from retirement, I do think there are some questions about that asset allocation. However, as I said above, the current stock market has a historically high valuation, with a future expected return over the next 10 years as low as 4-5% according to several financial services providers. Will it do better than that? Hopefully. Bonds have a similar outlook for expected return. So going to 60/40 right now isn't a crazy idea for anyone. You could argue it might be a very good idea. Same returns, less risk. I wouldn't do it if I were in my 30's, but if it helps someone sleep at night, or more importantly not panic in a stock crash and sell all their stock, then moderating stock holdings can be a decent idea.
I agree with you that bonds are not a perfect hedge against stocks. I specifically used the term "often" and not "always" when describing the lack of correlation with stocks. As you said, for the last few years sometimes they've been moving in a more correlated way because of the economic environment. However, over long time periods it's been shown historically that bonds can help improve portfolio performance. Are there other better ways? Sure. There are hundreds of portfolios you can find on the internet and from financial advisors all claiming superior performance to the 60/40 portfolio, with commodities, smal cap value stocks, TIPs, etc. Historically, the performance of these alternative portfoios is indisputable. It gets tricky when you talk about the future, though. Will all of these alternative portfolios still outperform? How much management is required? How much buying and selling of assets is required? What are the investment management fees? How complicated is the strategy. The beauty of 60/40 is that it's dead easy to manage, cheap, and tax efficient.
As a side note, we have a whole generation of investors that have grown up with the mindset that stocks always go up forever and any pain on the downside is relatively short-lived and manageable. We may continue to see that for the next 100 years. Or, we may not.