The effects of technology can counterbalance the increase in displacement and weight.

Take the change from carburators to EFI. While you can tune a carburated engine to be fuel efficient and powerful... you can't get both at the same time... there's no way to adjust the air-fuel mixture to operating conditions. That's why people still ask if a 1.1 or a 1.3 liter engine can make it uphill (even though, nowadays, even an 800cc car can climb up to Baguio)... because old carburators tuned for economy could choke under load and would not run properly (sometimes starve for air) at high altitude.

EFi gives you both economy and power. But cam profiles (which govern valve lift, duration and timing) on carburated and EFi cars are optimized only for a certain rpm band and use... due to the timing and amount of intake and exhaust air the valves can flow. So a car will run well and fuel efficiently at a certain rpm, but will be choked for power at higher rpms or will run badly at low rpms (if the cam is optimized for top end power).

That's where VTEC, VVT, VVTi, etcetera come in. VTEC was a revolution, not in that it allowed Honda engines to make a ton of power... no... but rather that it allowed you to have a cam profile aggressive enough to make 160 hp out of just 1.6 liters, yet could switch back to "economy" cams at low rpms.

Newer modes, like iVTEC and VVTi, can change the cam-timing by moving the camshaft itself around... not just changing cam lobe profiles... which means you can change when the valves open while retaining the same profile (old VTEC changed the valve opening and closing events as a function only of the different cam profile).

Which all means smoother running at all rpms, more power up top and more economy down low. And everyone's happy. ;)