I agree that the path from engine mechanical output to wheels certainly seems less efficient. We might be wrong about that, underestimating the losses in gear sets, but that's not my point and I also suspect that in that case we would hear more about gear set cooling solutions/issues.

But the path from fuel to engine output can be made far more efficient by designing the engine for a very narrow band of usage conditions instead of the crazy wide range from cruising at near idle to showing off what you paid extra for. Diesel trains have been diesel-electric for almost a century.