I ran some quick simulations and the differences don't seem particularly drastic:
The black line above is the cumulative total return (inclusive of dividends) of IEF. The yellow line is the so-called "excess return" index for TY (aka ZN), which is the cumulative return of buying and holding TY contracts. To compute this index, I assume that you buy and hold the front-month TY contract until a week before the delivery month, at which point you roll into the next contract. Finally, the green line is the "total return" version, which is simply TY's excess return index with return on cash added back (i.e., it assumes that your futures positions are fully collateralized). The annualized return difference between the two total return indices is <70 bps (I used fairly conservative cash return assumptions and the differences will be even smaller for most institutional investors).
The blue line is likely what you retrieved from NASDAQ. It's simply the rolling front-month TY contract prices. The problem is that this series doesn't properly account for the roll between contracts – if you roll from a contract priced at 120 to another priced at 119, you don't lose a dollar, but that's what that time series would suggest.
The underperformance of TY is to be expected, since IEF tracks the 7- to 10-year part of the curve, while TY has generally tracked the shortest bonds in the delivery basket thanks to the low yield environment. The chart below shows the time to maturity of the cheapest-to-delivers of the front-month TY contracts since 2010.
For an alternative perspective, the next chart compares TY's duration against the duration of Treasuries in the 7-10y sector (based on index-weights).