Ability? That's very very arguable.
WTF measures ability only because the first eight are playing?
Did you take into account the fact that they are not 100% since it's end of season and they are TIRED, sometimes even INJURED.
Did you consider it's only a 3 set competition in comparison with 5 set-Olympic gold?
It's not that simple.
No, it is not arguable.
At the WTF you do not have a single weak opponent. You have to win at least 4 matches against top 8 players, to win it.
And, Federer has won the WTF (then The Masters Cup) in a best of 5 final. Not to mention, that earlier there were other tournaments, that were featuring a best of 5 final format.
Are they then equallly prestigious as the olympic tournament nowadays?
By your logic, they are, as they were exactly the same format.
The INJURED card is a giveaway, that you do not understand tennis very well. Players play with injuries all the time. There is no guarantee, that they are fit for the OG. Nadal took almost a month and a half off before the WTF in 2010 and still couldn't get the job done (and in his best year (titlewise) off of clay, no less).
The tired thing is even more pathetic. Aren't all players tired, when the tournament rolls in?
I have to give the edge to the olympics, just because of its history/international prestige. If the WTF wants reclaim the eminence of former times, it has to go back to best-of-five format - only then I think it can carry the distinction of being a kind of "fifth slam".
In my opinion the competition at the WTF is just too strong, to give the nod to the Olympics.
I rate the WTF as it is rated at the moment (1500 pts) and the Olympic tournament above the normal M1000 tournaments (I think, that they should reward 1250 pts).
Aslo, I fully share your sentiment about the WTF going back to the best of five format of the final (and maybe the SF).