They went ot the new engines (supposedly) since most of the power unit companies didnt want to keep "wasting" money on technology they couldnt use on production cars. Going to the hybrid V6 is going to supposedly let them develop technologies they can apply to the everyday cars.
The engines they have are actually quite impressive. Drivers and teams have rev limiters in place due to the fuel restrictions, but without the limiters and letting the engines rev fully they can produce some amazing speed.
The biggest problem for this seasons F1 season was the whole car was new and only Mercedes had it "right" from the get go pretty much. Even when other teams figured out the systems, Mercedes was still way ahead of them. next season should be a lot better as teams have learned and can develop better units
This.
It was rather telling when Red Bull couldn't keep up, though they obviously were not far behind in Constructors. If Red Bull can step back into the game, and Mercedes can keep in the game, and other teams get a better grasp, a lot could lay ahead.
Frankly, it was the best decision to go to V6 Turbo. With the lightweight chassis and the right engineering, even Turbo 4s can produce awesome power in race-ready vehicles.
FIA actually really wanted to go with a Turbo I4 setup, but the manufacturers basically revolted.
It's a better concept all around, as the entire concept of manufacturer-sponsored racing is to develop technology that benefits consumers (or lets the manufacturer offer a better product to get more money from consumers, at the expense of other brands). And Turbo 4s and 6s, as opposed to naturally-aspirated V8s, are far more beneficial in the consumer space. The world does not have a love affair with our full-size trucks and SUVs - most like smaller SUVs (CUVs) and hatchbacks and sedans. V8s aren't are universal as many muscle-car-lovers want to believe. Considering their speed and acceleration isn't even hampered, I don't even see why it's an issue if they switch engine types. They've been steadily dropping cylinders for all of history, it's really only a matter of time until I4s or horizontally-opposed 4s are wrote into the regulations. They once ran with V12s, then V10s, then V8s, and they proposed skipping V6s altogether. I imagine by 2020 F1 will have some form of a turbo 4-cylinder powering those rockets.