I kind of agree, but if you have a very tight coupling, you could version control objects of the language and not text files. For example, a function could be versioned as a function, not a chunk of text.

For example, I have seen cases with diffing where based on whatever algorithm, a very small logical change, (like moving a function up or down in the file along with a minor edit), creates a very confusing side by side diff based on whatever similar lines it think match up.