Wii U can technically stream from internal memory too, as XCX demonstrates. And while GTA 5 on PS3/360 is indeed incredibly impressive for the hardware, it makes compromises too, most noticeably a poor framerate.

I'm not going to deny the frame rate issue but the whole game engine is far more ambitious with proper collision detection, far more realistic graphics, more happening in the game world and a decent physics engine. It's hugely impressive. Xenoblade doesn't strive at all for realism, its single goal seems to be impressive graphics but with terrible pop-in and a simplistic engine. Reminding me of Monster Hunter somewhat.

https://www.youtube.com/watch?v=_fbYyMq4cGU

The only similar open world game on wii u is watch dogs and not only does that fail to surpass 360 and PS3 graphics but it does so with lower frame rates, horrible slow loading and what can only be described as disc drive destroying never stopping disc access because of the lack of hard drive.

GTA5 is less demanding than XCX in a number of ways though; its world is not as large, and you cannot move through it as quickly and seamlessly as you can in XCX. As such, GTA5 is less RAM intensive, since it doesn't need to have as much data in active memory at any one time. Which is a necessity, as it has to operate on consoles with less than 500MB of RAM available for games, while XCX has the relative luxury of 1GB.

And a poorly made, low priority port is never a good indication of a system's capabilities. Bayonetta 1 for example looks and runs like deep fried vomit on PS3, but that does not prove PS3 is far weaker than 360.

Over 9000? Is that still a thing?

I don't think world size is related as much as you think to capacities of the console. That is data streamed in when necessary and in theory game world size can vary enormously using the same game engine.  Also with GTA 5 you can fly about in a jet moving about very fast in the map. 

Watchdogs developer has good pedigree. Ubisoft Bucharest had worked on all versions of Watchdogs and after developing the main formats they had time to create the wii u version. They created the ps3 and 360 versions and no reason to think the didn't try equally hard on all versions and they certainly had more time on wii u to perfect it. 

There were always issues with developing on ps3 because much of its power is in the cell processors which have a steep learning curve plus the 256MB video, 256MB main memory split. The wii u is a much simpler development environment more so than the xbox 360. Only 3 single thread cpu's on wii u, 6 threads on 360 and 2 ppc threads and 7 additional cpu's on ps3 to get working in parallel. 

The simple fact is this: 1GB of memory is more than twice as much as PS3 and 360 have for games. As such XCX is able to hold more than twice as much data in memory at once for things like textures, objects, map geometry, etc.

And the Wii U version of Watch Dogs didn't necessarily get any extra time; the other versions were clearly given priority, and the Wii U version was clearly a sloppy afterthought, as can be clearly seen from how horribly buggy it is.

PS3's hardware was difficult to work with in 2006-2008, but Bayonetta came out in 2010, when the hardware was no longer exotic or mysterious, and had been very well explored and documented. In the time Wii U shared with PS3 and 360, the latter were much easier to develop for, as devs had nearly a decade of experience, engine optimization, and tools catering specifically to the older hardware.