10L/hr is only 50hp. Yep, and do you cruise around all day on 100% power? I don't. 60% is more usual. Well within the realms of possibility.
You can buy and fit an M5 engine for close to £10k. And that's at Beemer dealer rates. How much is an O-200? A lot more than that.
Old technology after a while does cost a lot more than modern tech. Why? because of economies of scale. Try buying parts for old cars, it gets very expensive when supplies start to run low.
As in industrial terms there aren't that many Lycomings and Continentals, the parts cost per units are very expensive compared to more mass produced stuff.
Lycomings aren't reliable. Whilst they don't completely fail that often, how much gets spent on maintenance over their life span? I can think of numerous top-end overhauls, new starter motors, Mags, cracked cylinders and the like.
They are rubbish really from an engineering stand point. The materials aren't that good, the designs are poor and the output is awful.
If you think the as good as an engine could possibly be, then you are deluding yourself.
Just listen to someone trying start a cold lycoming on a damp, cold morning. If you don't get the fuelling just right, it'll flood or not catch properly. Tell me there isn't a better way........ Oh right there is, it's called EFI and Electronic engine management. Silly me.
As to the "well do it yourself then..." argument, if I was as lacksadaisical in my working life as they seem to be, then I would be rightly hounded out. They are engine manufacturers. It's their job to do it as well as possible. I do it in my working life, why shouldn't they?