I think the H2H could be allowed into consideration only as a last resort tiebreaker in the case of a clear tie in the other achievements, mainly titles. Nadal-Federer is an example of a h2h inclined clearly to one side from 2005 onward, but never brought into consideration (and rightly so) because there was never any need for it. So the entire thing here hinges on determining whether by tournament performance alone there really exists a clear tie between Vilas and Borg that can only be broken by the h2h. I just don't think the tie is there. Had Borg won the Masters, then I could maybe see the need for a tiebreaker like the h2h. But Vilas won 2 majors and Borg 1. Now, do all the secondary tournaments really make up for that difference, especially considering how much Vilas played and won that year? I really don't think so, which means the H2H should remain outside the measurement until the measuring of all other achievements is exhausted, including, if need be, the winning streak and the amount of tennis played by Vilas that year.
Certainly in those years, Federer was so far ahead of Nadal in other things (a 3-1 lead in Slams, most prominently) that H2H does not put Nadal in top place. But I wouldn't say that H2H was not brought into consideration -- or that it shouldn't be allowed to be brought into consideration. For whatever reason, sometimes H2H gets minimized these days to the point where it seems like it's being placed into another room, and referred to almost as an "intangible" that should be brought into the main room only if needed.
But H2H is in the main room, with all the other stats and achievements. It did count for something in those Federer/Nadal years. What exactly it counted for is another discussion, but my point here is, it counted. It carried some weight. But its weight could not have closed a gap of 3-1 in Slams and all the rest.
H2H did carry a lot of weight if you go back in history. Urban has pointed out that several decades ago, it was not enough to win a lot of matches, you had to knock out the reigning champ to be considered king. He was talking about a time before the Open Era, but it seems to me that in the 70s, H2H did sometimes carry a lot of weight -- maybe more than we're used to seeing now.
Some felt in '76 that Connors' 3-0 record over Borg was a significant achievement and a big factor in placing him as #1. In '77 Tennis Magazine (France) voted for Borg largely for winning Wimbledon and for his 3-0 record against Vilas.
There is a tradition in tennis that values H2H meetings between the top players, which is why I'm sometimes mystified when people seem to argue that H2H plays no part in judging the player of the year.
Even today, we all pay far more attention when Nadal meets Federer, than when Sela plays Isner. It's not merely because we like the first two players and are fans of them, but because that meeting really is more relevant to the question of who the top player is. That match can't just be subsumed into all the other stats, where it just becomes another number in the win/loss record.
Now if someone tells me that the H2H in '77 is not enough for Borg to catch Vilas, I can respect that position. As long as the H2H is not referred to as if it was not a result.
I also insist that the surfaces be taken into account. To me this is something very basic. When you look at a player's titles per year at the ATP site, you see the name of the tournaments, and the surfaces. It's a basic element in how we count up titles in a player's resume.
Surface is not necessarily a crucial factor every year, but it is in a year like '77. For me the one thing I cannot get away from is that the bulk of Vilas' activity, and titles, occurred on clay. And if part of the achievement of winning a tournament is mastering the court surface enough to bring home the trophy (how can that not be considered part of the achievement?), then breaking down titles by surface has some importance. I understand that to some fans it's not so important -- but it's definitely not irrelevant. If a player dominates the field on one surface, it is less an achievement than dominating the field on all surfaces.
One example of this thinking is in '83 when Sports Illustrated noted that Wilander was the only player, in that year, to win titles on four surfaces (although Mac did too, according to the ATP). It was not a decisive factor for SI, but they considered it a factor.