...I know the .22-250 you can put 5 shots in a dime, but I've never handled a .308 before. Biggest rifle I've shot accuratly was a buddies .338 Lapua out to 400yrds and grouped 2 1/2". Will a .308 group 1/2" or so at 400yrds?
A .308 is a better 'all around' cartridge than a .22-250, no doubt about it. Many a varmint has met his (rather explosive) end from either, but a .22-250 isn't very suitable to larger game.
I'm quite sure a .22-250 can put 5 shots in a dime, depending on the range, wind, quality of the rifle, with match grade ammo that the rifle likes, and real good glass... oh, and a very good shooter
1/8th MOA is a very high goal... If this is really your expectation, you should be looking at a dedicated bench rest rifle, not an 'all around' hunting rifle.
1 MOA is a much more realistic goal, and is sufficient for nearly any hunting application. Many off the shelf rifles are capable of 1 MOA, at least it is reasonable to expect this kind of performance.
Long range varminting is a specialized field, and really calls for a specialized rifle. A 2" target, like a prairie dog, at 400 yards would call for a 1/2 MOA capable rifle... and some real good shooting! That Savage, in either caliber, bedded in a good stock, with very good glass might very well achieve 1/2 MOA, but then again, it might require a good deal more work to get there.