That ought to do nicely for a start. Just don't stop there: working up to, & through, 150hp would be a very good idea.
Of course not, the ATL compact E6 would be utilized in both FWD and RWD applications to effectively replace the B/C-Series 6-cylinder engines. The initially RWD Morris models would feature E6s in a more moderate state of tune compared to the FWD Austins, with ATL MG models utilizing Twin-Cam E6s*
*- The possible performance benchmarks for the ATL E6 Twin-Cam (or related descendant) engine in later decades would be in naturally aspirated form a hypothetical 302 hp 3-litre inline-6 version of the 201 hp 2-litre Nissan SR20VE (if not a hypothetical 351-370 hp 3-litre inline-6 version of the 247 hp 2-litre Honda F20C) as well as the 286-355 hp 3.0-3.2-litre BMW S50/S54 inline-6 engines.
If deemed necessary the turbocharged benchmarks for the ATL E6 Twin-Cam (or related descendant) for MG in later decades meanwhile would be the 268-345 hp 2.8-3.0-litre Volvo Modular / SI6, hypothetical 3-litre inline-6 turbo versions of the Fiat Pratola Serra (including 165-250+ hp 2-litre 4-cylinder turbo Fiat Twin-Cam precursor), ~321 hp 3-litre Toyota JZ as well as the 276-325 hp 2.6 Nissan RB (at least in terms of displacement and featuring turbochargers).
No, aside Italy, I wasn't seeing much demand for a very small V8--but having that option, for some cars & some markets, might be handy. (Frex, would a Dino 246 be worse than a 208, given no other changes?) I can imagine a *Spitfire with a 2.0 V8, as a range-topping model that has the V6 {from the same basic design} as the usual choice. Would I demand it? No. Neither would I rule it out, if somebody in BMC engineering (or on the racing side) proposed it.
Healey would probably use the Rover V6 in an EX234-like Midget/MGB replacement model and the Rover V8 in a MGB/MGC successor.
At best the (still likely turbocharged/supercharged) ATL 2-litre Rover V8 along with tax special 2.6-2.8/3-litre Rover V8 engines would probably be utilized by the Rover P9 as well as other Rover, Land Rover / Range Rover and Healey models for certain markets.
By profligate, I meant two distinct, largely unrelated fours. (Or three?) Presuming BMC sees a lot of pressure to standardize (& I'd be pushing hard on it, myself), which leads to the end of Wolseley & Riley (as separate dealer networks at a minimum, as marques, if I had my way), it follows, IMO, there would be a strong drive toward standard engines, & I'd strongly advocate a single inline four (A-series to start, A-Plus, &, in time, alt-E-Series), a single inline 6, & a single V8 (if any; that might be able to wait for Rover).
That doesn't mean they're limited to spec by displacement (or state of tune), just by basic architecture: having a SOHC 2v/cyl Rover V8 & a DOHC 4v/cyl Rover V8 seems pretty wasteful & silly--unless the 4v DOHC version is developed outside (by Morgan, frex, or Cooper). I'm not entirely convinced even having iron & alumin(i)um block versions is a good idea, because that means separate production lines. Spend money on what improves quality & sales, instead.
I don't think we're fundamentally disagreeing on this issue, unless I'm misreading you.
Envision the ATL E-Series (which like the later OTL EA827/EA113 goes on to form the basis of 90-degree Audi V6 / V8 units) itself forming the basis of V6 / V8 engines to eventually replace the ATL Rover V6 / V8, the venerable reputation and thorough development of the Rover engines in ATL though would mean the winding down process would be very gradual before becoming post-production crate engines. Which would largely be helped by the relatively low-volumes of the ATL Rover V6 / V8 engines usage in Rovers, Land Rovers / Range Rovers, Healeys and occasional Vanden Plas as well as other smaller sportscar marques like TVR, Morgan and Ginetta, etc.
Thereby leaving ATL BMC with effectively two engine families down the line, the 750-1600cc (Volkswagen EA111/EA211, Suzuki G, Nissan CA/QG and Renault K-Type-like) descendant of the ~1596cc A-Plus and the modular 1600-3000cc+ (Volkswagen EA827/EA113, Rover S-Series, Fiat Pratola Serra/Multijet, Volvo Modular/SI6/D5-like) E-Series 4/5/6-cylinder (and V6/V8/etc) engines.
There is does not appear to be any fundamental disagreement, at the same time however it is worth bearing in mind ATL BMC should have little problem building 3 engine families (2 mass market and 1 relatively low-volume family mainly reservedfor prestige vehicles, sportscars, 4x4s, etc) for a few years under such circumstances to begin with since better management, rationalisation (Wolseley / Riley merged with Vanden Plas, single dealer networks, component sharing / commonization, etc) and product development would have allowed the company be able to maintain its OTL post-BMC position as the world's 5-4th largest carmaker even before acquiring Rover.