I have experience in both race cars and small aircraft (I own a Grumman Tiger and do most of the work on it). I am a big fan of electrical versus mechanical gauges.
I agree with the sentiment about accuracy on mechanical gauges; they do tend to be more accurate. However, today's electrical gauges are more than accurate in the rangfe we use them. Hell, I'd even say they're at least as accurate as a mechanical within our needs.
But note that electrical gauges can be calibrated and adjusted (electrically, of course) and when they fail (physically or electrically) they just quit working. Mechanical gauges, however, cannot be calibrated if they're off plus a failure can result in something as simple as a DNF (pressure release, gotta pull out) or as serious as a disaster (fire, engine failure from loss of oil).
Another plus for electrical gauges is that they are easier to install and ultimately lighter (no SS lines, no extra fluids, no mess). Plus, let's face it, you're really looking for trends in your dials; actual discrete numbers are basically useless to the pilot unless you're in the pits and your crew chief wants to know "what the number is." As a driver you're glancing over to see if the needle has moved, you're not looking down to see that the oil temperature is 211.37 degrees. Once you learn the normal range of operation accuracy of the gauge is not important (but consistency and repeatability is).
Finally, on the issue of sensor failures, a simple solution - one that I use in my airplane - is to mount the sensors to a remote block on the firewall, with lines leading from the engine to that mounting block. This resolves the issue of failing sensors due to vibration and eliminates the possibility of flammable fluids in the cabin should a line, sensor, or gauge physically fail.
My Tiger was built with "steam" mechanical gauges for the oil temperature, oil pressure, and fuel pressure, plus a non-shunted ammeter with a big fat wire running through the firewall from the alternator. These items have been the subject of Service Bulletins in regards to failing gauges, chafing and holing delivery lines, and big nasty sparks while in flight. I've talked to many a pilot that got the s**t scared out of them with fuel or oil leaks while at 10,000 feet (which, at a 2000 foot per minute descent, means you're on fire for 5 minutes before being on the ground). I replaced my gauges with an electrical package and plugged all the holes in teh firewall; they've been very accurate and dead-nuts reliable for almost 10 years. Plus, I gained almost 5 pounds of usable load in the process be removing all the lines and fat wires.
I know a lot of folks have an affinity for old steam gauges, but when it comes down to brass tacks it's a failure item that has the pototential to move the issue from inconvenience towards safety.
Greg