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Honda has been building ~40% thermally efficient engines for two decades. The engine in my Insight is ~39% efficient over a pretty wide band, and it's not hard to stay in that band. Honda achieved this efficiency in an engine without forced induction, without variable valve timing (thought it still has variable lift), and without resorting to the Miller/Atkinson cycle which robs torque, and these engines will generally run reliably for 3-500k miles before needing any kind of service. The Accord hybrid's engine peaks at over 40%, but I haven't seen any BSFC numbers for it. Which is not to say that Mazda significantly exceeding that isn't an amazing accomplishment, but comparatively speaking the current Skyactiv engines are not that great.
I'm a proponent of PEHV and hybridization. It makes a lot of sense to me to add a small battery and reliable electric motor in return for being able to simplify and downsize gasoline engines. An engine need not be efficient over such a wide power band if by electric assistance, it need only run at its optimal RPM and toggle on and off as needed. This is the arrangement Honda has in the Accord hybrid, and it works. A car need only have a large enough engine for steady-state driving, which for most sedans is a 1.0-1.5L 3 or 4 cylinder, and you can add as much performance and passing power on top of that as you want with the addition of an electrical system.
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