And as I originally said, you have to ask, "why is internal combustion a better option at this particular time, for this particular task?" It is one thing to have an engine that sort of runs, it is another to find a niche for it where this type of engine is superior to others. IC engines OTL found their niche first of all as motors for automobiles and boats; clearly the main thing was to have a reasonably handy, responsive, not-too-heavy engine that could deliver the power required and could handle a variation in power demand quickly. An IC engine that good required late 19th century technology.
I believe Diesel's first compression-ignition engines were very different, they were gigantic things intended for stationary power generation and he was indeed hoping to make the thing work on coal dust. The thing is the diesels did not so much find their niche in such applications as in boat propulsion and eventually big heavy motor vehicles.
Diesel was hoping his engine would become widely used in part because he was able to achieve a fair efficiency with his huge slow version. This is because IC engines in general can achieve efficiency because of high compression ratios which correspond to very high combustion temperatures; high temperature (attainable because the engine, be it spark ignition or compression, is only at the very high temperature for a moment, then the gas expands and cools, so the cylinder only needs to handle peak temperatures momentarily and therefore that peak can be hotter than available metals can stand on a sustained basis) gives the prospect of higher efficiency according to Carnot's principles.
Again though, this advantage of IC engines can only be attained with fairly sophisticated ones. There's no magic that says that just because my engine runs on explosions of fuel in the cylinder and yours is a steam or stirling or something like that, mine will therefore be better! In the early 19th century steam was clearly the way to go.