The former England captain said Alastair Cook's side were in danger of winning a series 3-0 yet taking less positives out of it than their opposition.
Despite playing with little to lose with the series already in the bag and with a full house at The Oval there to cheer them on, England dropped anchor on day three and decided they'd play for a draw.
At stumps they were 4-247, trailing by 245 runs on the first innings, with the game going nowhere in a hurry.
This despite pre-match claims from Cook that England were desperate to create history by winning 4-0 at home against Australia for the first time.
Scoring at 2.13 runs per over, the go-slow tactic looks like working with rain predicted for day four, but Vaughan warned it may invite Australia back into the second stanza of the back-to-back Ashes.
"The Australians could potentially take more positives than the England side," Vaughan said on the BBC.
"They've found more shape in their batting order and know more about their bowlers.
"Look at Old Trafford, Australia won pretty much all the sessions bar one where Kevin Pietersen made his hundred.
"In this Test they've won quite a lot of sessions so basically 80 per cent of the sessions since Old Trafford, they've won.
"The difference between the two teams is England have been able to cope when it's really mattered and Australia haven't.
"But the sides are a lot closer than we thought they were going to be."
England opener Joe Root (68 from 184) admitted his side did have a responsibility to entertain, but that the result was more important.
"There's some sort of responsibility or no-one would come and watch. But it can't happen every game," he said.
"We have to get the best possible outcome for England."
Root denied the block-fest was at the direction of skipper Cook.
"No, definitely not," he said.
Australian great Shane Warne wasn't so sure on Twitter.
"England Capt Cook said he wanted to win this test match & make history 4-0 how about playing like it then !"
Australian fast bowler Peter Siddle said his side can take heart from the fact England have deferred to ultra-defensive mode when they've been put under pressure this series at Old Trafford and now at The Oval.
"I guess it's a positive that we're playing some good cricket," Siddle said.
"That's all we can do. We did what we had to do with the bat and got stuck in with the ball ... we kept building the pressure, kept at our game plan and kept the runs down.
"It's hard (when a team plays for a draw). As a bowling team you want to take wickets and you want to have a chance to take wickets."
Having prided himself on being an excitement machine, Kevin Pietersen played like a statute - scoring 50 from 127 balls - his slowest half century in Ashes cricket.
In the 75th over, Pietersen found the fence and a disillusioned crowd roared in recognition - as it was England's first boundary in 11 overs.
Pietersen and Jonathan Trott took 145 balls to reach their 50 partnership, and Pietersen and Ian Bell 41 off 122.