Ok, so I spent about 2 hours playing this last night (the original version) and I am going to say that I think the power-ups need to appear more often for the following reasons:
1. During one game from Wave 1 to Wave 3 I saw a total of 2 power-ups. That might have just been bad luck, but it seems to be consistent across most of my games that power-ups are sparse on about this frequency. (and this was allowing every group to deploy the smart bomb)
2. With so few power-up appearances I find that when I get a power-up I like (2 ships, fast shots, etc.) I can just camp out with it, destroy groups as quickly as possible and greatly reduce the appearance of any future power-ups, thus preserving the good power-up I already have. If power-ups dropped more frequently, it would force me to decide if I like the new power-up better, OR it would make me try to dodge the new power-up I don't want potentially setting me up to get blasted by the next incoming group. In higher waves this would amp the challenge level significantly.
3. Getting power-ups is a fun part of the game play (I'm thinking Arkanoid here) and having them more prevalent, for me, only makes the game more fun. Can I get the power-up I really like? Can I keep it? How far can I go on one power-up? How far can I go when I get a crappy one? All of these game play elements only come up if power-ups show up on the regular.
But that's just me, I'm deep in the pro-power-up camp. I'm sure others have difference perspectives on this issue.