Stan (and others):
When I was a kid, I hung around Al Alden's engine shop in Massachusetts. Al was the premier Porsche engine builder for the racing set on the upper East Coast (and a truly nice guy). Porsche factory trained, wrench pulling for 20 years before I met him, starting in the Military (like a lot of folks).
When I was starting to build up air cooled dune buggy engines, I heard and read the same stuff about more and more horsepower. Al wasn't hung up on the age of the engine design (it is what it is) but he would be the first to tell you that if you stress ANY engine to the max, the reliability will lessen (duh! like we don't all know that) and things break. The doctors and lawyers who were buying his racing engines expected to win, expected to drive them very hard, expected things to break and expected AL to fix them (week after week, sometimes) and could well afford his services.
When I would go to him with, yet another wiz-bang part idea to get a few more horsepower out of a 1200cc VW (all I could afford), he would say: "Look.....you're a kid, and you don't have a lot of money to waste on this. I'll show you how to build one up with good power - not a giant killer, but good, reliable power with proven, reliable parts that will last for years. THAT's what you really want. You can't afford to be pulling your engine to fix it all the time like these doctors do."
I've always remembered that, and when I built up my 2110, I figured that was about the limit for displacement, power AND reliability that one could expect from a 1600-base VW case. I may be wrong, but I see quite a few trouble-free 2110's on this forum, and even more with less displacement, usually driven by us older folks whose years of hard accelerated starts are behind them (for the most part). That doesn't mean that you won't find the occasional soft cam or poorer quality parts - they are all aftermarket parts from smaller manufacturers than original VW's, but, given careful research of what is going into your engine and asking a lot of questions of others on here, I bet you can have a good, reliable, 140 - 150hp Type 1, OR Type 4 that will last for years. Then all you have to decide is to go with the cheaper T1 or the more expensive (and less stressed) T4.
What's in YOUR wallet?