You can size the PHEV range extender engine to be much closer to the steady state power requirement, and tune it towards such as well. The BMW i3 uses a literal scooter engine for the range extension.

The i3 can't do more than 40mph when using the scooter engine.

It can do more than that, especially if you've got the Euro-spec Hold State of Charge coded to be enabled. With HSOC, you just drive as normal and the scooter engine tries to keep the battery at the charge level you turned it on at. You only really notice that the car is noisier.

Car engines can weigh up to 1000 pounds, but the standard weight is much lower. the VW group 1.4 turbo (probably one of the most common engines around) comes in at 230lb

I feel like this is a bit of a double standard.

If we're questioning "focus on range of 400km or more" then we're already looking at the high-end EVs. Sure there are ligther engines around, but so are lighter batteries, no? Heavy powerful ICEs sell because they're desirable, not because they're the most practical. Long-range EVs sell because they're desirable, not because they're the best match for the average person. I have no doubt that as soon as reasonable city infrastructure exists for EV charging, there'll be a lot of BEVs with small batteries for driving around the city.