Well, from a strict power perspective, you're right - spellcasting is superior to melee in terms of its ability to eliminate opponents, which is what most fights come down to. So a Gish is 'worse' from a levelling perspective than a pure spellcaster because it delays access to the gamebreakers of top-end spells, but better than a mundane melee because MAGIC. If you start at a high level, though, a Gish is superior to a standard spellcaster because they have 9th level spells and the ability to stab things in the face for the one-in-a-million occasion where a spell won't do the job. They're still 'worse' than the most powerful of pure spellcasting classes, but that's pushing the boundary between PO and TO so it's neither here nor there.
TLDR: The more magic you have, the more powerful you are. Gishing slows your access to more magic, so it's less powerful, unless you start high enough level where it doesn't matter, in which case it becomes more powerful.