"the PS1 had much better 3D performance [than the Sega Saturn]" - not true. However, the Saturn used a quadratic accelerator when PS1 (and PC) were using triangles; properly made ports for the Saturn were 30% faster than PS1 (see : Tomb Raider, which actually came out on Saturn first), however many developers decided to make ALL their games using triangles, and simply used squares with a side set to 0 to emulate these. And when they made a square ? On PS1 you needed 2 triangles, and on Saturn... They used 2 triangulated quads instead of using a single quad. Because, who has time to make a proper port?
That's before mentioning the lack of perspective correction on the PS1's texture mapper, causing all the textures to warp hideously.
So, no - the main reason wasn't because the Saturn was less powerful - if anything, it was the most powerful 3D-capable 32-bit machine of the time, ahead of the PS1, the N64, the 3DO or the CD32.
The Saturn's main problem was Sega's own 32X Megadrive/Genesis extension : ask a game maker to port their game to Sega's platform, and they have to choose one or the other (while using similar chips, the 32X, with or without Mega CD, had very little else in common with the Saturn). So, which one? Almost unanimous answer was, "Meh - I'll do PS1 instead, and treat Sega's platform once Sega sorted out their crap".