No, hardware is not too powerful. First of all FF16 has no ray tracing, is running as low as 720p and 40fps.
There is a common desire to believe that you are superior than your forebears. Actually not true. Anyone today, in 2023, could release a game like Ocarina of Time, or Mass Effect, or any of the older games, and they would sell in the millions. The reason why modern studios make large games that take a long time to make is because they are not as risky. Easier to make, easier to make money. You are hiring a lot of art grads to build content, but they can build on shallower bones than their forebears. Every time we see companies attempt to make old style games, the product is usually not as good, as the people employed to do it are not as good and not as experienced.
You need to find the TALENT that made the SNES and N64 and PS2 generation of games. Those human resources are rare and precious, and not many of them exist, that's why we don't see games like that anymore.
Those musicians? Top notch. Those game designers? Battle hardened through the NES generation. Those artists? Young and with fires in their bellies. Most of those old games were made with PASSIONATE first generation computer experts.