It‘s running most games in 720p - 800p in handheld mode due to the display resolution, not due to performance issues.
Many games don‘t support 16:10 anymore, they will be displayed 1280*720, the others will run 1280*800.
And probably you can run less demanding games in 1920*1200 downsampled to native resolution. But is the battery drain worth that?
Actually a lot of games probably DO support 16:10, since apple has always pushed the format and a LOT of laptops are folling suit in recent years. its not like its hard to make a setting for 16:10....
as for the performace, remember that the switch's hardware, the launch model X1 chip, has raw performace capable of near 1.9GHz on the CPU and 1GHz on the GPU when the switch, due to wanting to run consistantly and without overheating, runs at a lower rate even while docked(1Ghz and 750Mhz), and around 60% of that on the GPU undocked, meaning that in portable mode the switch is only using around half the performace of the entire chip.
now while the steam dock might be more open, clock speeds might be BIOS limited.
Ergo, we honestly don't know the raw specs it will actually do before someone like digitalfoundery gets a hold of one.