It's both, really. Yes, Palpatine really is that powerful and yes, the Jedi were that unprepared.
I recently read through the prequel novelizations and the RotS one has an interesting insight on this point. In a nutshell it posits that the Jedi spent the last 1000 years training in how to fight the last war, while the Sith spent that whole time *planning* the next one.
The implication being that the last war against the Sith
looked pretty much like this. Hordes of furious Sith warriors facing ranks of stalwart Jedi Knights. Thing is, since Darth Bane the Sith have mastered subtly while the Jedi have stagnated.
Consider how few Jedi in the last millennium would have faced another force user in single combat. Most of them are more used to deflecting blaster bolts that parrying sabre thrusts. Add to that Palpatine's raw power as he just explodes out of his chair and cuts down two of them before they can even react. Admittedly it's wasn't staged particularly convincingly as neither Jackson or McDiarmid are particularly experience swordsmen, but the concept is sound.
It's not something that comes across very well on screen, but remember that they've already said that the ability of the Jedi to use the force is being diminished. By the end of the war they were practically hobbled, thanks mostly to Palpatine.