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V8s have a great sound, but americans have historically been very bad at getting any kind of fuel mileage out of them.
downsizing would be an idea, you could technically make a 2-3 Liter V8, but then you have the complexity of two equally performing 4-cilynder engines.
and especially ford doesn’t do mechanical complexity very well, look at the 1.0 ecoboost.
Does anyone who buys a mustang care if it gets good MPG?
Certainly not a priority, but Ford still has to meet certain standards that as I understand it keeps getting tougher.