after reading every post, I have to say that I love my 97 hp Twin Cam engine but reality seems to me to predicate that water-cooled engines will be in play in the near future due to EPA mandates. Hopefully, the upside will be more power in these vehicles.
When I read up on it last. The reason I seen for vw not importing aircooled bugs to the USA was that smog restrictions would require added expense. That added expense made the vw bug with its aircooled engine less profitable. It was a matter of dollars and not the fact that they could meet restrictions.
Subaru seemed to be able to make it work, and to do so profitably. The Subaru 4 Cyl is such a direct copy of the VW engine that it even has the casting mount for the mechanical fuel pump used on carbureted VW's that Subaru never had. I suspect that the demise of the VW Beetle had as much or more to due with it's crash worthiness and it's ability (or lack there-of) to withstand the vehicle impact standards. On top of this; the air cooled VW engine wasn't all that dependable either. 1966+ had to have a valve job every 70K or the exhaust valves would pop off and the engine would grenade. Prior to that (1965 and older) they burned exhaust valves about every 40K. The best that could be said for them was that they were incredibly simple and that no matter how badly they broke . . . it was always cheaper to fix them than to throw them away.