No replacement for displacement is a crock!

Sorry to join thread late... however...

I have to agree with 2ndGenTeg and spoogenet, there is no ignoring the hp/L number when arguing over displacement as king. All internal combustion engines are fancified AIR PUMPS, and the more taken in the front and pumped out the back, the more torque/hp any given displacement will make. The practical limit for this is whenever you cram so much air and fuel into a motor that the mixture attains enough heat to pre-ignite(detonation). There are a lot of things that affect the ability of an engine to inhibit detonation, but the foremost contributor is the compression ratio(CR)!

Upping the CR increases power... to a point, that being when the motor experiences detonation. A primary inhibitor of detonation is... swirl! Swirl is the relative turbulence of the intake charge(when the piston is approaching TDC during compression, especially) and there are many factors that contribute to swirl, among them:
piston/head design
valves per cylinder(more increases swirl)

The piston and head design is doubly important because it not only can increase swirl, but also control detonation through even distribution of heat in the combustion chamber. Spark plug location within the head determines the rate and pattern of flame propagation during the power stroke(this has the potential to make or break an engine: think of the hemi; it is successful due to a combination of these principals.) More than two valves per cylinder(think DOHC) leads to better intake and exhaust flow: the smaller passages create air that moves more quickly and with more turbulence, both adding power.

Ahh... whoops, I kinda went off there... but I think the most important thing to note about FI vs. NA is that if you're adding forced induction, you're essentially increasing displacement by cramming more air into the same space, whereas a larger motor will intake a similarly larger amount of air without the coersion of a super/turbo - charger... and you'll hit a ceiling of performance. Then what happens when your buddy/opponent slaps a 'charger on his larger motor of equal specific output? You're toast...

Happy trails...