Nail on the head, Kragan. Exactly. The torque of these little motors simply can't keep up. Also, that is a positive-displacement supercharger in that picture, as opposed to the centrifugal designs. That means the parasitic loss is pretty high, and the overall efficiency of the engine will drop. The pumping losses should go down though
I think SC's are great, but even then you must separate them into "camps" of positive displacement (Roots, Whipple), and Centrifugal (Vortech, others I can't think of at the moment!), and those two have drastically different behaviors as it is. A Centrifugal almost feels like a turbo...and in reality it is 1/2 of one! Power up top, but pretty gutless down below. Also, a nice advantage of low parasitic loss down low though. The Positive Displacement ones (like that one in the picture) are a different animal altogether. These are the ones you see sitting on Dragsters with their neat air intake and accompanying red throttle butterflies on top of the engine. These roots-style or whipple blowers constantly force-feed the engine, and are a bit parasitic by design. The great thing about these particular S.C.'s is their ability to literally LEAP off idle with a ferocious amount of power, thanks to that design. It becomes far less efficient at upper RPM's, but man, if you are after that low to mid-RPM always-there power, the whipple/roots is the way to go. Really, if you're after some bottom-end grunt but not really needing the top-end rush, go with this type of SC with supporting mods (fuel, etc.) and you should be pleased. Automatic transmission cars seem to like this mod as long as the torque converter won't die under the additional torque!
A turbo (or centrifugal supercharger) would be the other side of the fence, used to benefit at the upper rpm range (and you could say that the turbo is more efficient at this.)
With a turbo using the otherwise wasted energy contained within the exhaust of the vehicle, it is INDEED more efficient then a supercharger, which is operating on precisely the opposite side of the engine, PULLING torque and power from the motor. Of course the power a supercharger develops through its air compression more then makes up for the parasitic losses, but that is why a SC doesn't produce the same HP at the same forced induction pressures as a turbo GIVEN everything else including CFM FLOW are equal. This is not up for dispute or debate, it is a function of the way they work! Both are fine, because an engine with more power is still going to please the owner, no matter which way the power is created. A turbo simply borrows from the waste-side of power creation to do it. Both setups require more fuel to work properly, as proportionate to the amount of air the engine takes in, so that is a wash. The intercoolers are a whole 'nother matter, but my gut feeling is that as long as there is an IC on the setup that can somewhat drop the air temp back down to near ambient, then who cares how it did it? Water cooling (like that one seen in the picture) has its own problems to deal with, as does Air-Air, but either way you've got cooler air and you'll need anytime you compress air (thermal dynamics classes 101)
I got to agree with a lot of people who say that a turbo is easier! It isn't that it is less complex (its NOT), its not that it is any faster (its NOT), its not that there are cheaper parts (NO WAY)...It comes down to the fact that turbo systems are designed almost in a modular way, as compared to a supercharger. Bottom line: If no company makes a supercharger you want, you're going to do a LOT of custom work. A turbo will require some work most likely, but it is a much simpler affair overall. If a company does make one for you, its damn near bolt on "Technician level B" work! Lucky YOU!
Actually, its the torque required to turn them. Thats why they are not so great on 4 bangers. Even the higher horse power hondas (s2000 with 230+ hp) can't spin a SC well because of the lower torque rating. SC's are parasitic so they are robbing the engine of torque to produce higher HP but not nearly as much torque on a 4 cylinder motor. Now, on bigger american muscle cars you see SC because there is plenty of torque to go around.