Why are 318's low HP and torque?

The 318 was the grocery getter, the truck motor, the people mover. It was never meant for high performance use. Even the "police interceptor" 318s were not true high performance engines. They had 360 heads with larger valves and ports to gain flow, but lacked compression. I think Chrysler didn't try to pump it up in part in the late 60s and early 70s, because it could have come really close to the 340 and the 340 WAS Chrysler's performance engine.