Partly it was political too. They went with the PowerVR because 3DFX told everyone they were working on the next Sega console.
My dream was that Sega and Lockheed Martin co-develop a new console-specific GPU for Dreamcast, call it "Real3D-500". It would've far surpassed Model 3 in every way, unlike the PowerVR based Dreamcast that we got. Problem is, Lockheed Martin never understood the console/consumer market and all their good hardware was extremely expensive. Nevermind the terrible i740 used on Intel motherboards and the Lockheed Starfighter card.
That's not true. Not in every way. Sega's own AM guys even said that Model 3 was better than Dreamcast in some areas. Model 3 could do anti-aliasing for free. for one thing. Also, all Model 3 games were locked at 60fps, can't say the same thing about Dreamcast games.