True within reason. However, it's easily fast enough to run texture mapped 3D games, we have plenty. which are over an order of magnitude slower to render, and consume far more ram, and have to transfer a lot more data than a plain rendered poly game would. If it can do that, it can do a plain shaded racer with a lot more poly's. Plain vertex data is actually very small, especially compared to vertex lit or texture mapped data.
Try to get away from something that looks exactly like that screenshot. Think of it more as inspiration (it's what inspired me, but perhaps I was wrong to post it). Imagine F1GP if you like, with quadruple the polys, and more colours. I think a fast 030 could do that. An 030 with FPU or 040 could do yet more. Using a LOD system would help, as would a decent backface cull algorithm. You can also use blitter line drawing and fill abilites, though that might introduce sorting issues (you could use it for the 3d cockpit- like coala has). If you keep the game on a flat plane, you could use the copper to generate palette lists for the sky, and perhaps the ground (Trex warior and guardian are good examples of this).
If you have more technical info you would like to bring up, please do. While not a coder, iv'e worked on 3D games for the past 14 years from the PS1, DS to PS3, and I can understand where you are coming from, if not any code you post