Interesting perspective, Ron. I don't know that I agree regarding current transmission thinking. That's sort of like talking about the current state of religion - there's more than one take on it.
There are an increasing number of race cars, and transmission builders, running lockup converters.
As far as the top of current thinking being the Powerglide, you may a well say the top of current engine thinking is the smallblock Chevrolet!... there are a WHOLE bunch of people who beg to differ!
There's a more limited choice of commonly available lockup converters but it is by no means terribly restrictive. Precision Industries for example makes custom lockup converters in any size I've found necessary for things I've done so far.
There is a contingent of late model drag racers who have proven time and time again that with the converter unlocked, their vehicles slow down. They lock the converter halfway through first gear and keep it locked the rest of the way down the track. The ET's and MPH back up the logic: just like a clutched manual trans vehicle, once you are under way, you don't want your converter (or clutch) slipping.
'Glides are very durable and relatively inexpensive, and although that missing planetary gearset means less parasitic power loss, it also means you're limited to two gears... if you don't have massive torque numbers to make a low stall speed converter livable, you have to run a loose converter. That causes power loss and heat. On the street at cruise, as you said, that's bad news. But even on the track above the stall speed, that's not the ideal way to transmit power to the ground. Even if you can live with the sloppiness, that strategy would take second place to a less lossy, multigear transmission that keeps the engine on the bubble via gears, rather than by slippage.
You had stated that lockup converters and extra gear sets (overdrive) cause heat... Can you quantify that?
Chris