Nonsense.
You have to value the amount you are playing with or you won't play your A game.
I don't care about $5 and will bet it on anything.
You should be playing the highest stakes possible as long as you are comfortable in the game. Don't play with scared money but also don't play with money you don't care about either.
Chances are you are playing against people who are at too low of a stake and they don't care...
More Nonsense. If players do not care about the money they are throwing around in a game, then you can consider that "dead money". They will be making mistakes because they don't care.
Passive players can be beat, if you play smart poker. Moving up to get rid of passive players just means the chips will be harder to come by.