Here is good article: http://www.rifleshootermag.com/network-topics/tips-tactics-network/hitting-a-high-or-low-angle-shot/

Gravity is acting pirpendicular to horizontal not line of sight.

Certainly, yes, gravity always acts towards the center of the earth. When we talk about bullet "drop" when shooting at an angle, A, we're speaking in reference to the line of sight, so to figure out that drop in relation to line of sight, we have to consider how gravity is acting in relation to line of sight.

So we split the force of gravity into its component vectors, with one component equal to m*g*cos(A) acting perpendicular to the line of sight, and the other component equal to m*g*sin(A) acting along the line of sight. These two component vectors sum to equal the total force of gravity equal to m*g acting perpendicular to horizontal as you stated.

The technique magnum_willys (and the article you posted) described only accounts for the first component that acts perpendicular to the line of sight and ignores the second vector acting along the line of sight. It also ignores the air dynamics, leading to error.

P.S., I'm simplifying by talking about line of sight. In reality these calculations are affected by the difference between line of departure (or bore line) and line of sight, especially at extreme angles or extreme distances.

P.P.S., I find it a little funny that the article dismisses velocity as having little effect on bullet flight. Tell that to everyone obsessing about muzzle velocity and talking about magnum cartridges as "flat shooting" because of all that powder.