Me and Sarah Jane is boring (to my ears) and Follow You Follow Me might be a popular song but I don't think it offers anything here (or to most live shows)
While I disagree with most of what you say about 3SL, especially in comparison to SO, I do largely agree with this ^. While I actually love M&SJ on Abacab - for me, it's a classic - the 3SL version is poor and somewhat clunky. But they needed to bolster the presence of the recent album otherwise it would've been represented by the title track and Dodo. No Reply didn't sound good live and would've been a poor choice; MOTC might've been a possibility I suppose.
FYFM is ok but underwhelming and as you say, that's characteristic of its live appearances generally. At the recent tour I went to 3 gigs and during the 2nd and 3rd FYFM was the only time the show started to drag a bit. It was also dull on the 07 tour.
Misunderstanding - I've never minded the song and thought DS added some nice touches to it live but the elongated vocal business near the end is irritating and overdone. (Did that feature during its appearance on the TLD tour?).
But yeah you're right, they were both big hits and couldn't realistically be left off.