As said in other comments, not a power thing. Example, the Nintendo Wii U chose to use 3 1.2ghz (iirc) Out of Order execution cpu's that were more like a PC than the cores in the Xbox 360 even though sounding similar in instruction set and composition.
This lead the Wii U to be able to do things like Run Mass Effect 3 and Deus Ex better (arguably) than the PS3 and 360 most of the time. The Wii U was probably the better hardware platform in hindsight but it came too late and the development tools were not as robust so ports just kinda afterthoughts.
You're comparing the 2012 Wii U against 2005/2006 360/PS3. The PPE was indeed terrible but it's not clear that IBM had anything better available at that time.
The Wii U also needed to be backwards-compatible with the Wii, which used the bespoke paired singles and locked cache line features of the GameCube's PPC 750 derivative. This almost certainly locked them out of newer PowerPC designs without more engineering work than Nintendo would be willing to put into its systems.
For context, Nintendo has always been weirdly quirky and low-buck when it comes to core silicon engineering. The Switch is a Tegra X1 in a trenchcoat, the SNES used a 65C816 at about half the clockspeed it needed to be[0] and had half the VRAM removed at the last minute, and the NES stole[1] the 6502 masks so they didn't have to pay MOS for legit chips. All of those design decisions were made purely to improve margins and genuinely constrained game developers in the process. "Lateral thinking with withered technology" is kind of just their thing.
At least now they're 100% on board with a silicon vendor with a sane roadmap, so they'll at least have a steady supply of backwards-compatible last-gen chips to repackage.
[0] At least it wasn't as slow as the Apple IIgs they pulled it from
[1] Technically legal as IC maskwork rights did not exist yet. This is also why decimal mode was removed - it was literally the only thing MOS had a patent on in the 6502 design.
I've never heard anything suggesting that video RAM was removed. AFAIK, the SNES was planned to have only 8KB of main RAM, which was increased to 128KB by release. I think any support for 128KB VRAM was for future proofing, like if the SNES's hardware was reused for arcade systems, or something.
The Genesis's video chip can support 128KB video RAM as well, which besides allowing a larger variety of tiles on screen and doubles DMA bandwidth. It was used in the System C2 arcade board. The Genesis was originally designed to use 64KB video RAM, but after hearing about the SNES, support for 128KB was added. Then they decided that the extra RAM didn't make enough of a difference to justify the cost, so they left it at 64KB.
This lead the Wii U to be able to do things like Run Mass Effect 3 and Deus Ex better (arguably) than the PS3 and 360 most of the time. The Wii U was probably the better hardware platform in hindsight but it came too late and the development tools were not as robust so ports just kinda afterthoughts.