The Bates story about 'super-power of suggestion' meant his super-mind was altering physical reality itself instead of just the perception of it. My suspicion was Cary was trying to create a plot device to explain all the continuity gaffes in the supermythos of that time, and perhaps extend this to the DCU in general.
I can certainly understand why they wouldn't have wanted to keep that. If Superman had such a power then eventually he'd figure out a way to control it. While this would lead to some interesting story ideas, it would radically change the nature of the series. We expect Supey to punch the bad guys, not to alter their physical reality by the power of his mind.
In a similar vein, I remember a Jack C. Harris Supergirl story in which SG quite unconsciously (and one would assume telepathically) used her super-vision to hypnotize a male interest, making him become a super-villain. Not surprisingly, they let that one die quietly as well.