In the real world with real people, what matters is efficiency. Top performance that you can only achieve in benchmarks is not any indicative of efficiency.
We're comparing it to gen 1 to emphasize how far it is from being competitive.
Not really new; this has been the case with all the Tensor chips. I kind of assumed Google was going to step up their game at some point, but I don't think Samsung can produce chips on par with TSMC. Google is switching to TSMC for next year's Tensor 5, so maybe we'll see a big jump then.
That said, I don't think it's a deal-breaker. I'm running a Pixel 7 and it's "fine". The Pixel 6 had bad throttling/overheating problems, but the 7 and 8 are better. We'll see what the Big Problem is with the 9 series. There's always something.