Lhasa,
It is true that sprinklers alone may not be enough to save lives in every situation. It is also true that there is not a system that will guarantee that no one will ever be killed in a fire.
It is a fact that the combination of automatic fire sprinklers, smoke alarms, and the appropriate building fire protection features will give occupants their best chance of survival. Another big plus is a professional, well staffed fire department that is proactive with it's inspection/code enforcement, public education and training programs.
I did a little "Google" research on the fatal fire you referenced in Tennessee and found the following news account:
http://www.wkrn.com/Global/story.asp?S=3261959
I must admit that my first reaction when you said that the local fire chief had made the statement that a sprinkler system would not have saved the life of this girl was to think that he must have been the chief of a small volunteer department or grossly misinformed. I came across the following editorial that echos my feelings and explains what happens in a fire very well.
http://www.chattanoogan.com/articles/article_66125.asp
Bottom line is this; Wouldn't it be easier to spend the money necessary to protect our kids from the dangers of fire than to re-live the loss and tragedy that this family is dealing with over and over?