Is the combination of Psychic+Shock Wave really that potent that it can obliterate the entire game with very little issue?
Yes, and if you haven't used it you definitely should try it out.
To elaborate on the simple yes, Alakazam comes at a time in the game where its sheer level of power is just overkill against anything and everything that is a neutral target. Even with the relatively underwhelming power of Confusion (which is a move that's pretty much on par for Gym 2-3 BP), Alakazam makes up for it by sheer hole-punching ability of its special attack, and so finds it very easy to rack up a bunch of basically free levels - particularly so because Alakazam is in the absolute best EXP group in the game, medium slow. By the time you get to Wattson, who would be a potential stumbling block, Alakazam is on track to get Psybeam, a notable step up in power from Confusion, and tears apart his Emerald team and does well enough against his RS team as well. Zam's special bulk, while not exactly great especially long term, is still rather good for how early in the game this is. Adding in Shock Wave allows Alakazam to now hit opposing Psychic types, Dark type, and Steel types slightly harder, but Alakazam is still finding it relatively easy to muscle through virtually everything with Psybeam and in the process continue getting higher and higher leveled.
Mightyena on Chimney is a small annoyance for Alakazam but certainly not an undefeatable one, and Flannery goes down relatively easy. Norman can be tricky if you've been purposefully not leaning on Alakazam to give it EXP as Psybeam is finally beginning to be less than perfect, but realistically this is only an issue for Slaking, everything else goes down well enough.
Often I find myself with Alakazam around level 36 and Psychic for Winona, but if you're not there are worse investments than to dump money on a Psychic TM from the game corner. If you can afford it then it also lets you smash Norman much more easily. Psychic and Shock Wave take Winona for a wild ride and dismantle her team, with virtually no threat to Alakazam. Alakazam continues paving the way forward although it should consider taking a break against Tate and Liza - it's not dead weight because Psychic can still brute force its way through though it's certainly not ideal and Shock Wave is an unpleasant experience for Xatu. The game is finally catching up with Alakazam, 4 gyms after it started its rampage.
The game promptly obliges and rolls over for Alakazam with Sootopolis, since Alakazam cleans house handily. Alakazam's sheer usefulness virtually everywhere up to this point and its fantastic EXP group generally leave it with a sizeable advantage against virtually all opponents. The Elite Four are the biggest and arguably only roadbump in Alakazam's wild ride, with Sidney being annoying, although Zam can take out his water at least, and Phoebe being just as much so though Alakazam can generally take out a couple Pokemon since they're not immune to Psychic. Not Sableye of course.
Glacia and Drake are almost even matchups for Alakazam. Psychic is just as punchy as ever, although they throw high leveled and somewhat bulky opponents at you. I don't usually find Alakazam has too much trouble, but it's not as clean as things once were. The champion diverges wildly, as Wallace gleefully loses to Alakazam for the most part and Steven rejects Alakazam though Skarmory and Armaldo are targets for our psychic friend.
Overall Alakazam has one of, if not the, best earlygames in RSE by taking every neutral matchup and breaking them over its psychic knee. Steel-types that actually give Alakazam pause are fairly few and far between - the only particularly annoying ones are Steven and RS Wattson. Every other Steel-type Alakazam can break through due to its sheer power without too much difficulty. Dark types are also rather rare, and those that do exist are usually the very unthreatening Mightyena who Alakazam can power through with Shock Wave because Mightyena is terrible or are the Carvanha line who get punished by their electric weakness and very low bulk. Sidney is somewhat problematic, but is also the weakest E4 member so failing to break through isn't overly difficult to cover.
Alakazam really is potent enough that it is able to obliterate the vast majority of the game with little to no issue. The unimpressive Elite Four matchup and the brief period of Abra deadweight certainly weigh against Alakazam, but overall it still manages to be one of the absolute best Pokemon in RSE and deserve its S rank.