Even if it is a longish 3rd down the FG still means you need a TD (albeit with the FG you get a win instead of a tie) and if you miss on the 3rd you are likely in a better spot in terms of field position for the Stamps than after the FG.
It was a really odd decision, especially considering the two earlier 3rd down calls. Bill Simmons often says "ask yourself what the other team (or their fans) want you to do in that situation" and in that case i think 100% of Stamps fans and the team would say kick the FG.
The drops by Jordan (x2 at least) and Parker (guaranteed TD on a catch any of us could have made if Parker ran us to that spot) really made that game a lot closer than it should have been.
I don't see the Argos having much of a chance but we have seen in the GC before that weird things happen and teams that should have no shot win (Ottawa last year, Sask 2013, TO 2012 etc.).