I currently have a 350sdl and 06.5 jetta tdi.
I have owned many 123s and consider them one of the best cars of all time.
You cannot compare a true gps 50mpg car to anything else right now w/ fuel at 3~4 dollars/gal.
I see many tdi's w/ over 300K miles on them and many more 123s w/ odos broken at or above that mark.
The 123s have better fit and finish by many miles, but there are no new 123s so my vote goes to the vws. Safety is hard to judge but I rank the 126 (mass wins usually) above the tdi and the tdi above a 123 (a 123 saved me and my family's lives from a redlight running broadside by a pickup).
Maintenance is actually less time consuming in the vw. Oil at 10K, timing belts at 100K and the rest a relative wash except for the valve adjustments on 617s. The vws don't 'sweat' or 'mark' so it's usually a cleaner process as well. I have never owned a manual tranny MB so I 'd say the vw tranny is easier to maintain. There seems to be a lot of grumbling from the vw owners w/ dsg when it comes to fluid change time.
The largest factor for me is driving fun. The vw (ok I had it chipped to 150hp & 250T)) will spin 1st and 2nd gears and handles like a modern car and gives me a clutch (123s w/ clutches require prayers at mergiing time IMHO).