In recent years, industrial controllers for modern wind turbines have been designed as a combined wind speed estimator and tip-speed ratio (WSE-TSR) tracking control scheme. In contrast to the conventional and widely used Kω 2 torque control strategy, the WSE-TSR scheme provides flexibility in terms of controller responsiveness and potentially improves power extraction performance. However, both control schemes heavily rely on prior information about the aerodynamic properties of the turbine rotor. Using a control-oriented linear analysis framework, this paper shows that the WSE-TSR scheme is inherently ill-conditioned. The ill-conditioning is defined as the inability of the scheme to uniquely determine the wind speed from the product with other model parameters in the power balance equation. Uncertainty of the power coefficient contribution in the latter mentioned product inevitably leads to a biased effective wind speed estimate. As a consequence, in the presence of uncertainty, the real-world wind turbine deviates from the intended optimal operating point, while the controller believes that the turbine operates at the desired set-point. Simulation results confirm that inaccurate model parameters lead to biased estimates of the actual turbine operating point, causing sub-optimal power extraction efficiency.