That stumbling block was kinda a big deal. They couldn't get the G5 into a laptop nor dual processor G4s. The Intel macs were much better than their G4 counter parts, especially once the software was optimized.
Heres a comparison from the times:
http://www.anandtech.com/show/1990/7
So here's what I see from that article:
In January 2006, Intel's newly released Core architecture (Yonah) completely kills all previous Intel and AMD architectures. It's magnificent.
Performance/Watt the Core Solo is almost as good as the two year old 7447/A G4 that was released in April 2004.
The 1.5 GHz G4 consumes ~25 W and is fabbed on a 130 nm process.
The 2 GHz Core Solo consumes ~30 W and is fabbed on a 65 nm process.
By 2005, Freescale had a 90 nm 7448 G4 that consumed ~30 W at 2 GHz that Apple chose not to use, but you could get if you bought processors upgrades from shops like Sonnet or NewerTech.
In mid 2006 Intel went 64-bit with the Core 2 Duo (Merom). An excellent family of devices.
By late 2006, Freescale had a 32-bit 90 nm dual-core MPC8641D that consumed ~30 W at 1.7 GHz. Again, that Apple chose not to use.
In early 2007, P.A. Semi released the 65 nm PA6T at 2 GHz, a 64-bit dual core. A SoC (CPU+Northbridge) that consumed around 25 W and had a performance/Hz that far surpassed the G4 that at this time was still better than the Core 2 that ran at 35W and that's not the Northbridge included.
Intel had better fabs, best in class to this day.
Windows didn't run on PowerPC, a great differentiator.
There wasn't a great variety of PowerPC processors to chose from.
I'd say that Apple would've been in OK shape performance wise if they hadn't jump ship. The G4/e600 core was an _excellent_ CPU core, best of class, years ahead in performance/w and performance/Hz and is probably still competitive in this regard still easily beating most ARM devices too, especially in FP and SIMD. And the e600 evolved into the e5500 and e6400 cores improving this. Now-days (since 2012 actually) you can get 12 core PowerPC SoCs consuming less than 30 W (without GU though). Apple had a PowerPC license, they bought P.A. Semi and could've kept on developing PowerPC CPUs, perhaps licensing a GPU from nVidia or PowerVR and integrated that. They could've done this on their own without Freescale and IBM that didn't really want to make the CPUs Apple needed.
And they used P.A. Semi to concentrate on ARM, witch was an excellent move.
And while we're at it. This new thing Intel's doing, opening up their fabs to other designs.. they don't need an ARM license to make Apple's ARM chips so they could've done this years ago, but I think they pitched ultra low power x86 for Apple's iDevices all those years and missed the boat.