I really doubt there's any actual processing capability in the dock (beyond possibly an upscaling chip), I'm sure any difference (if there even is a difference) in processing capability between docked and tablet mode is due to it going into a lower power mode to extend the battery life. I'm also confident that any processing difference will be used just to increase the rendering resolution and possibly framerate while docked, not anything massively gameplay altering.
An interesting implication is that, if I'm right, you could get the same benefits in tablet mode just by plugging it in to a wall charger (though obviously there any increase in resolution would just work as fancier AA).
I think people are worrying about the processing power issue too much. The Tegra is no slouch, and especially at 720p I think it will be able to do a lot more than people thing. Just look at the Shield, which also runs on Tegra: it does better at 1080p than the 360 can with same games at 720p, so if you take a newer, more powerful Tegra in the Switch, running games at 720p it'll be just fine. It's not going to be PS4/Xbone quality visuals, but I don't think it necessarily needs to be. Then add to that either an upsampling chip in the dock to sample the resolution up to 1080p (like how the PS4 Pro is doing 4k) or using a performance boost from being plugged in to render at 1080p native and I don't think there will be too much issue.
I also think Nintendo is making a mistake by marketing it as not a 3DS or Wii U replacement. They should market it as a replacement for both. That's a pretty good value proposition to parents to be able to say look, get this one thing and now your kids have their handheld for the car in addition to their home game system, you don't have to buy two separate things.