I understand and basically agree with you, my point is a 318 not necessarily a underdog in capability, but more where it makes it's power which to me is more of a design consideration.
Eg. I want/need/designed to make X hp in Y powerband how am I gonna do it, or I'm gonna take X engine and make Y hp and design the car around it etc..
Problem is most take the route I'm gonna have vague goals pick random hp build this engine cause of vague reasons and barely take the rest of the car and driveline into consideration.
Which is generally gonna have more negative effect on smaller displacements than larger ones, don't necessarily make them an underdog just poorly built.