The AVL was the first attempt at meeting stricter emission control standards, and it sufficed until Euro3 standards emerged. The AVL attempted to retain as much of the original appearance of the engine as they could, but some things were changed.
The new UCE was a required change to meet new Euro3 emission control standards.
Since a new design was called-for, they brought it up to modern manufacturing standards, while also meeting emission control requirements.
Definitely a different target market.
The Iron Barrel was aimed at a vintage biker market,and those consumers mostly knew what they were getting into. There were some who just bought it because it looked cool and didn't cost alot, but they had a steep learning curve(trial by fire).
The AVL was not much different than that, but had a few refinements.
The UCE is a totally different animal, and is aimed to be a modern powerplant in a retro appearance package.
I would put the few hp difference down to the narrower rings which lowers friction, and the EFI and ECU, which improve efficiency.
I think about 10 more ponies at the rear wheel would have been a preferable choice, and they could have done that without compromising reliability, IMO.
They had a new platform, and I think they could have gotten rid of the "slow bike" reputation pretty easily, if they had wanted to. It won't ever be "fast by modern standards", but about 28-30rwhp would have gone a long way to make it feel more powerful on the road.
I'm not sure what to think about all these chassis tuning issues, because it seems to vary from one to the next.
What I can say is that the old Bullet can handle up to 40rwhp and 100mph+ on it's standard chassis quite easily, and is pretty solid and stable with that kind of riding. Although the old drum brake is a bit weak for that kind of duty.
All in all, I think the UCE hit the target pretty well, particularly in styling of the C5.
I think there is room in the line for a sports model, with some added power. Sort of like Triumph does with the Thruxton Bonneville.
It's my opinion that most retro market consumers would prefer to have the engine perked-up by the factory, and wouldn't want to be taking it apart and modding it themselves. A factory sports model could keep it in the "no fiddling with it" category that the retro market likes.