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If you have a sufficiently small engine with sufficiently tall gearing, your pulses become infinitely long. In the case of the Insight, the 1.0 in 5th gear is running at very high loads just cruising, especially when it leans out to ~25:1 AFR.
A factor to consider in the hypothetical argument is, what RPM will these engines be running? Where is peak BSFC? If you're gearing to get the same power output, the 2L engine will be spinning half as fast, and although low RPM = less frictional loss, you'll rarely fine a gasoline engine in that displacement range that's terribly efficient at ~1000RPM due to (I think?) the geometries required by gasoline's flame speed.
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