Any time disc activity gets high enough, your entire system will slow down - that is inherent in every computer and always has been. It has nothing to do with the app per se, but the hardware has inherent limitations in how much data it can move, and how fast it can move it, in any given time. Finder is also reading data from the same hard drive, over the same data I/O bus as TM and every other app you have running - they all share the same pipeline to the data volume.
TM can indeed "handle it" - do your backups proceed successfully? Does your computer continue to process other tasks while TM is running (albeit at a slower pace)? But until the I/O load drops, system performance will be what it is.
You can upgrade your machine to a newer, faster device. You could replace your hard drive with a faster solid state drive. You could replace your over the air Time Capsule with a high end, faster local hard drive on a very fast wired connection (a firewire 800 or lightening external drive).
But no system has infinite performance capabilities - everything is limited, and when you push one of those criticial limits, like high volume disc input/output, the system will inherently slow down until that load diminishes.