Andy, An earlier post stated that aircraft engines need to be powerful, efficient and lightweight. I think reliability and (within reason) simplicity should be added to that list. Every new system introduced adds to original cost plus ongoing maintenance costs. Every additional system is another potential point of failure. If it aint on there it can't fail.
One old engineer reckoned water cooling an aircraft engine made as much sense as air cooling a submarine.
Another factor often overlooked is total installed weight. It's all very well producing 4HP per cubic inch or whatever but it's not much use if you then need huge radiators,huge oil coolers and a strong heavy gearbox specially made with appropriate torsion dampeners to make it all work.
All the above doesn't mean that there isn't room for improvement. One of the most promising is the PRISM system being developed by GAMI. If you're not familiar with it Google it up. Many of the problems with air cooled cylinders should disappear once a PRISM system is installed.