Z series and power definitely do not share an instruction set, and they have really substantial differences, but that isn't keeping the engineering teams all that separated, if indeed they are at all.
Quoting Timothy Prickett Morgan from http://www.itjungle.com/tfh/tf... , "And as has been the case in the past, the Power and z processors are designed by a single processing team and are borrowing technologies from each other. This does not, however, mean that IBM is creating a converged processor that can support either Power or z instruction sets." My hazy memory makes me think they're sharing FPU blocks, possibly one of the bus interfaces, and it seems like one of the cache blocks (L3?). Z has plenty of custom hardware - I think it's fair to say it's predominantly custom - the branch predictor would have to be pretty different, and of course power doesn't have a BCD arithmetic unit.
Point being, if you're going down the Z Series road to run a Unix-like OS, why not just (conceptually) stop early, end up with something like Power, and call it good? Anyway, I'll argue that they're spiritually and economically related, and there's more than a passing family resemblance. Kind of like power and modern ("advanced server") iSeries, though that's getting more into Deliverance territory.
Meanwhile, channel controllers aren't as dumb as they look. A little wikipedia action here (I know, citing wikipedia, but it's monday and I'm still tired): https://en.wikipedia.org/wiki/... . Turns out the little dickens can do a decent amount of work on its own. I think the wikipedia entry is showing its age... seems like IBM's done a lot more work since this.
I remember when SASI came out. I looked at the spec and thought "Hey, this is a lot like a channel controller." Then I read some more and decided "No, a channel controller is much smarter. But this isn't bad." SASI became SCSI and everything else flowed downhill from that. At a very real level, Linux is forcing a million dollar fibre channel array to look more or less like an ST506 connected a board from 1984. Wild.