That's certainly the uninteresting way to approach the races, but the game hardly offers an alternative as, once again, the events allow a weird combination of bikes in some cases. Why is an RG500 even competing against the 696?
Despite having an extra crankshaft and a jackshaft, two extra cylinders and carbs etc. as well as liquid cooling (and being 20 years older), the RG is no heavier than the Monster but has 15 bhp more stock - keep it on the pipes and gear it properly and it will walk away on technical and high speed circuits alike. Additionally, the Monster will hit a brick wall of air resistance, whereas the faired RG will slip through to a higher top speed even with the same power.
In this game, cornering speed is dictated by lean angle, and lean angle is determined by ground clearance and is not directly modifiable (e.g. with higher "rearset" foot pegs). The 696 is low to the ground for short people (compared to its 796 and especially 1100 cc cousins), so it may well have less lean angle available and so simply won't go around corners as fast, even on better tyres. You can add preload to both ends to make the bike sit higher, but I'm unsure if the benefits are just in agility or if it recalculates / adjusts the maximum lean angle - try it out. Many bikes actually clip through the ground at full lean, so it may just be set manually, individually or by category or something else entirely.
PP is certainly still useless; use simple physics instead. Even then, the numbers are not always accurate, both as compared to the real bike and to what the game appears to use in the physics vs. what is displayed in the dealership. In any case, power to weight ratio is still the best indicator of relative performance. The power figure alone is more important if traveling flat out for long periods. A torquey motor pulls better out of corners and is less sensitive to gearing.
I like to pick a bike that lets me hang with the leaders on the straights and then tune the AI difficulty until they are not getting in the way in the corners - which often depends on how well I know the track and what tyres the AI are randomly assigned. You do have to do the work to find the right level of challenge, unfortunately.
Luckily cash is more readily attainable in this game, so the odd wrong purchase to probe the competition is not a catastrophe.