I think Mentalism is an attempt to solve two issues:
(1) The Too Perfect Theory
(2) The How Did You Do That? Problem
Magic in general is too perfect, hence the common reply during or after witnessing magic of asking how is it done. By putting the emphasis on process and procedure mentalism gives plausibility to the outcome. From a performance standpoint this is simply just another layer to the deception, but I think it takes the sting off of being challenged or fooled by trickery.
Intellectually it is more satisfying for both the performer and the audience. Emotionally speaking thoughthat guttural reactionmagic excels because of the inherent disconnect b/w method and effect, hence the wonder as to how it is done.
As far as power-dynamics go, I think mentalism when properly performed, has the upper advantage. Swiss-Army Mentalism wont do the trick for the reason of believability. I also think that this is the flaw that the Magician also shares with the Swiss-Army Mentalist. The fiction of what you are doing will become apparent when you can do everything. But I think theatre, persona, and character development solves these issues.
In the end it's the performer who we want to see. That to me is the indication of success. I want to go see Max Maven or Michael Weber or Juan Tamariz. Why? Because you're going to be amazed and entertained and perhaps learn something along the way. That they do tricks and mentalism stunts, well, that's just a bonus. Stellar performers seem to transcend the cultural baggage and preconceived assumptions/notions/definitions and blow them out of the water and become a name, not just another act.
These are just my interpretations of ideas already openly discussed by prominent Mentalists such as Max Maven, Michael Weber, Bob Cassidy among others. Thanks everyone for the input. I am sure in a couple of days as it sinks in, it will probably revise what I currently think about mentalism and magic. Again, thank you. It kind of helps to get some sense of what exactly it is that we are doing. But I suppose one cannot overly analyze it without killing it as they say.