If the manufacturer does not opt for the top of the line GPU, games suffer too, since by doubling the resolution, you need to quadruple the pixels rendered. Apple made this mistake with the iPad 3 and iPhone 4, both which performed worse than their predecessors.
This PPI race reminds me of the megapixel race in cameras. Where dumb consumers think a "higher spec" is better when it actually gives them a fuzzier screen (pentile OLED over non-pentile, not in LCD), worse battery life, and worse performance in games.
