I wanted a IIgs when I was younger, until someone told me about the Amiga. I also looked at the Atari ST. They were both cheaper and much more powerful. (I went with the Amiga. )
You are right. The CPU speed was lame. They also dragged their feet giving the IIgs a decent OS. If they released a souped up IIgs (Apple IIx or whatever) back in 1984, do you think the Mac would even exist?
It would have been exposed as being a dead end with no backwards compatibility. The GS was essentially a completely different architecture from its predecessors anyway. Compatibility was maintained with the Mega2 chip. Apple wouldn't have been stuck for a couple of years with barely any software on their "flagship" product.
The GS would have killed the Macintosh if they raised the clock speed, gave it some higher video resolution modes, and developed something like the Macintosh Toolbox in ROM for it.