Diesels have better torque, which is mostly what feels like "power." Few people travel at top speed, so lower horsepower does not have the same feeling to the driver as high torque.
They are good for accelerating 0-40, but they are significantly slower at 40+ -- which is where most people accelerate hard, like merging on the highway or passing.
When I merge onto the highway, I use 5500-7000rpms, when I don't want to accelerate quickly, I use 2000rpms. It's why I hate driving diesels: 280ft-lbs at 2000rpms is useless and only 105hp; I want 280ft-lbs at 6500rpms (345hp).