It would be able to run a game approximating GTA 3, but would really need to be built from the ground up for Dreamcast. I think the PSP GTA games probably give a closer approximation of what could be pulled off on the Dreamcast. But making software for a specific platform really does dictate the choices that are made in terms of design.
Personally I don't even think the PS2 can run GTA 3 as the frame rate is so low that even at the time I found it incredibly difficult to get into until the PC release landed.