gibblet,
You are absolutely correct. Horizontal distance is the only factor influincing arrow drop. However, at relatively steep angles such as if you are 30 feet (10 yards) up a tree shooting at a target that is 10 yards from the base of your tree, your lazer would read (line-of-sight) 14 yards and some change. This accounts for the majority of close shots being high. At 20 yards the effect is somewhat less with a hypoteneuse of 22.4 yards. The further out you get, the less effect it has. I used to carry a pocket calculator to the stand with me to do yardage conversions and I guess for something to do (yeah I'm an engineering nerd).