You made your point in the first paragraph. Torque ∙ rpm (in Hz) = N∙m/s = kg∙m/s^2 ∙ m/s = W. The point to remember is that it's the rpm of the pedal that must be measured, rendering the gear ratios irrelevant. This also renders losses to drag, and changes in potential energy, irrelevant. Going uphill you produce more watts, downhill less. Ride in a headwind, more wattage; tailwind or drafting less. It's a direct measure of the watts the rider is generating. Excellent point! This is an elegant solution.

Joe