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HP/liter is, when it comes down to it, a meaningless measurement. It correlates to some interesting things but it's not all that interesting in itself. HP/lb is a far more interesting measurement, for instance. HP/$ is also to the point.
Large displacement engines tend to develop their power at low RPMs, which has advantages for hauling large weights (such as the big cars those engines are in), and for noise. It also has some positive impact on "drivability", though in an automatic that's more a matter of transmission design and in a manual it's a matter of drivers not wanting to wind the engine up. Thing is, though, if you drive a small-displacement engine up in its powerband, you tend to eat fuel just like a large displacement engine...
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