Re: why focus on internal power
It was because Ueshiba had internal power skills that he could espouse a philosophy of peace (as Rob pointed out). When he realized what it made the body capable of doing without having to resort to "waza," he could just stand there and let his attackers harmlessly bounce off him, or he could choose to do something else with it, expressing it outwardly through whatever techniques he chose to "make happen" -- which were invariably more powerful than technique effected without an internal "force" behind them. The thing is, the internal skills gave him a choice.
Old saying: We bargain from a position of strength, not from one of weakness. We're not in a position to bargain for anything, only to beg for mercy, when someone else's boot is on our throat!
This sounds harsh, but it's Nature, and is true whether talking about a physical confrontation, or a business deal. You have to have an edge; having power -- whether it's physical power, legal power, financial power or psychological/emotional manipulation power -- is that edge, though the latter three apply mainly to society and culture more than to the "Law of the Jungle."