That's true. He is about power, about asserting dominance on an emotional and psychological level. He just has no interest in "material" power (i.e., to ruuuuuule the world). In fact, as you said, he'd rather destroy the world than admit to emotional weakness.

And you're also right about his narcissism. That's a consistent character trait across all of his incarnations--Liam, Angel, and Angelus. (Angel's friends keep calling him on it, but he's been slow to learn...)