Mafia boy, your argument completely falls on its face if you look at the Corvette.
And I mean completely.
The ZR-1 & ACR Viper were my only exceptions but I left it out of that post because we aren't talking about the new school. And even at 1350-1400kg even the old school vettes weren't producing 600hp unless they were insanely worked (like the L88 spec motors). But they were the lightweights of the group. Look at the Pontiac GTO, Challengers and such, all weighed quite a bit more than that Vette!
Also,

at Rotaries, considering an LS1 weighs less than the twin-turbo 13B setup in the FD3S and makes more power.
That's because of all the piping, put a big single turbo on that 13B and it changes the game a fair bit. Besides, I don't see many LS1's producing that power WITHOUT some form of forced induction either. We produce 600-700hp rotaries in Australia on most days thanks to our wonderful scene out here that are fully streetable.
Putting an SR20DET into a 510 is a bit more than some bolting in...
Actually no it doesn't. You get the crossmembers and mounts from an S13/14/15 and it will bolt in without too many troubles, I've seen this for myself, just a couple of extra drilled holes to mount it up properly.
Most Japanese compacts from the 90's, such as the Silvia series, weigh around 1200 kg, not 800. A Corvette weighs under 1400kg.
Ahh, but I said an Escort & Gemini which ARE from the 1970's and 1980's which ARE around the 800-900kg range. The S13 is only a tad over 1100kg, it's the S14 & S15 that get porky at the 1250kg mark. Don't think I'm sticking with the F&F crowd on this, there are craploads of small cars here that actually weigh that little, from 510 Datsuns (and their little brothers, the 1200, 1000 & 120Y), to KE20 Corollas, Gemini's, Escorts, Lancers (no, not Evo's, the OLD SCHOOL Lancers!) and the RX series (RX3 = 850kg, R100 even less!). And since you went with the 90's.....I actually owned a Mazda 121 bubble....guess what that weighed?? 805kg!! So not all 90's Japanese cars are porkers. With a BPT motor fitted, I was looking at a stock 200hp in a sub 900kg car and with slight mods would've been looking at 300hp quite comfortably.....makes me wish the car was never slammed into and written off by a drunk driver. Think about it, a car that produced as much power as the DC2R but weighed 150kg less than the DC2R with 2/3 more torque....would've been good on the sprint times considering the DC2R does low to mid 14's stock standard.
Making over 300 HP reliably on any 2 liter turbo motor requires a fair investment.
No it doesn't. EJ20 STi = 300hp STOCK. 4G63 = 300hp STOCK. SR20VET = 300hp STOCK. Later 3S-GTE's produce 210-250hp stock and only needs a small boost rise to 300hp, SR20DET is 250hp stock and only needs an exhaust and small boost rise to make 300hp, and a lot of people actually get 400hp out of them quite reliably without a turbo change, just improving the fuel flow was their major hurdle. The Mazda BPD (1.8L turbo) produces 210hp stock, boost/exhaust & FMIC get it to 300hp easily, FJ20DET requires a small boost rise, FMIC and exhaust for 300hp, Cosworth 2 Litre requires similar small mods for it. You have to realise that most of these motors are built to handle higher amounts of boost thanks to factory forged pistons, strong conrods and a strong bottom end and most have a history dating back to the early to late 80's when F1 & WRC technology was filtering down into their road cars (such as the Nissan FJ15 F1 motor becoming the FJ20 after detuning it for street use, but still shares a fair bit of the technology developed from that F1 motor).
Older compacts, such as the AE86, have solid rear axles which is exactly what makes Mustangs handle less than ideally, so yeah...
But you didn't take the weight into account. It's still a lot better pushing 900kg vs 1500kg and makes life easier on the Live Rear Axles, plus they have limited slip diffs which helps compared to an open diff Muzzy.
Power to displacement is one of the biggest ricer arguments ever. Making power out of a LS series engine is insanely easy, and far more reliable than making equivalent power out of just about anything from Japan aside from maybe a 2JZ and an RB series motor, and even then you have turbo lag. Producing 300HP out a B18C without a turbo requires some serious work, and they don't handle boost the best. The H22 is a much better choice and thats mostly because of its lower compression and larger displacement.
Just because I talk about power to displacement I'm a ricer??

Allow me to retort.
I was producing OVER 280hp from a STOCK 1JZ-GTE in my MX83 Cressida.....that's factory numbers because my 1JZ was from a JZA70 Supra which has a bit more power than the JZZ20-30 Soarer's, and that's without my FMIC and 3" exhaust. Plus, I never said that the B18C had to be mildly worked, there are some crazy DC2R's going around here with around 300hp naturally aspirated thanks to Honda mechanic's here being tied in with companies like TODA and JUN. The H22A isn't the best choice at all times, even with it's bigger displacement as more people find it better to use the B20 block/B18 head combination.
Even my old Gemini (which was powered by a crappy Isuzu G161 motor) produced 176hp after a lot of mods (stock was 60hp) such as a 40/80 camshaft, forged Arias pistons (domed), Carillo conrods, Peter Jackson Racing crankshaft, rejetted G200 carby and such, but because of the light weight (we stripped her down to under 800kg) and driveline improvements (fitting a good brass button clutch and lightened flywheel and better yokes), we were able to get the car to a best of 13.81@96mph in 1995. Even after all that work, the total cost was less than buying a 302ci crate motor. If you compare that to cars of that era, we were running alongside Porsche Carrera's and beating Mazda RX7's, not to mention whooping everything from the HSV brochure which were running up to 5.7L blueprinted motors!! We then did a milder tune with a Isuzu G180 which we put in another Gemini we owned using a 25/65 cam, Arias pistons and a 40mm IDF weber, but hooked up a 100hp 'dry' nitrous kit and produced 245hp on the bottle. Because that was a cruiser, we were using an unmodified auto transmission which affected 60ft. times (try 2.4's for 60ft!, that's how slow) we were still able to get that car to run 13.54@104mph. Once again, those times walked over any factory V8 in this country at that time.
But like I said, the bottom line is what makes us do it, because we love our small cars!!