Are you calculating plopping down $1000 on 8/20/99 and stepping away or putting in $1000 a month during that 20 year period?
OK, I checked, you just plugged in a single investment in August 1999, near the peak of the bubble. Not a continuous flow of money each month, which would have gotten you much more like 9-10% a year. Plopping all your money in in 1999 or 2000 would not have been great, agreed.]
So, basically, other than 1999-2001, the average schmo just buying an S&P 500 index would have gotten better returns, for the most part, than Madoff's fictional steady 8%.