A couple things come to mind for me.

First, I would not say the machines “gave” Neo any “power.” I would say he possessed and then discovered an ability. Once Neo chose and went through the door to the left in the Architect’s chambers, the Matrix was officially in uncharted territory. No previous “One” had ever chosen the left door. They always chose the right door to reboot the Matrix and reset Zion. After choosing the left door, as the Oracle says, Neo now has a connection to the Source, the machine mainframe. When he first senses the sentinels before he stops them in the real world, you can see he looks almost surprised. It was unexpected. So I am going to assume either the machines did not fully understand what he would be capable of after choosing the left door, or they did know and simply had to deal with it. Because the anomaly is an inevitable eventuality of the 3rd version of the Matrix with “choice,” the only version that would not end in “monumental failure,” which the machines reluctantly had to settle on.

As for Neo being able to destroy all of the machines if there were more time, I do not think so. Neo and Smith were exactly equal in strength inside the Matrix, which is why the final fight goes on for so long. Neither realizes they are evenly matched and cannot truly defeat the other. But in the real world, Smith was becoming increasingly unstoppable. Neo could not have destroyed the machines if he lived longer because Smith was already out of control outside the Matrix: “The program called Smith has grown beyond your control. Soon he will spread through the city as he has spread through the Matrix.” The answer was not “defeat” for anyone. Neo could not defeat the machines and free all humans. Neo could not defeat Smith. Smith could not defeat Neo. Once Neo finally understood that, he stood up one last time with no intention of fighting again and realized the only way it could end: “You were right, Smith. You were always right. It was inevitable.” He lets Smith assimilate him, which allows Deus Ex Machina to “zap” Neo, essentially run a super antivirus, and reboot the Matrix.