AS said its more the availability of aftermarket parts. There are many parts out there to make a 727 live at that power level. With a TH400 there are just more options, kinda like a BBC vs a BBM. Both capable of making power one just has many more options. The one thing you cannot get for a 727 is an SFI case, to me that s a big deal. FWIW my 64 Savoy has a 727 built by Joels on Joy, it makes north of 1000hp. From what I've been told torque is the larger issue with a TF than raw HP. The Vette has an A1 built 727 and it makes a tick over 1100hp. They are both very nice pieces but are not a budget friendly one.
You are correct it's the torque that is the issue vs. the HP level. That said the diesel market is building 47/48RE's that handle over 2000 lb/ft of torque so it's doable , an SFI case would be nice though.
