I worked of Deutz diesels for 6 years. A lot of gen sets, pumps, but we put a few in a box type truck(UPS, Fed-ex type), a non turbo 5 cylinder in there. Still more in some big Poclain hoes. Atlas Copco and IR compressors, Ditch Witch used them in many machines. Even had a guy drive up one day with a V-12 in a White Freightliner! If I recall he said in the hills it would outpull the other guys, but didn't have the engine braking.
You can get an air cooled in a smaller package, smaller package can mean less costs all the way around. Not sure the big deal about the oil sprayers under the pistons. I have seen them on other engines to. Whether sprayed or splashed, oil is used to cool the underside of a piston. On the 912 series (ditch witch size), the fan was belt driven, a cut off switch would kill the motor if the belt broke. The 413 V series had a centrifugal hydraulic drive fan.
The only overheat or melt downs I had were caused by using the engine in the wrong spec. One expensive one I remember was a very large over the road crane(max boom was over 500'). Just shipped it in from Germany to New Orleans. Smoked the motor entering Texas. The fuel pump was designed for intermiting loads while driving around europe. They got on I-10 headed to Houston where it is flat. We replaced the motor after recalibrating the pump.
A couple of yall mention the one cylinders. Funniest one there was I got a service call to the Houston Heights area. Figured it was a construction site. Nope a house, lady answers the door, then points to the sail boat in the back. A hand start single cylinder Deutz to power around if needed. Which isn't as bad as it sounds, to keep the single cylinders running smooth, they (and the 2 cylinder) had a huge flywheel. They always shook like crazy until you got the rpms up. Not that hard to start with a ratching compression release and crank.
As far as overheating, this past summer some neighbors at the weekend place were putting in some water pipe, about a mile of it. Rented this beater ditch witch. I think they ran it 8-10 hours solid. Oh and being a mechanic I noted there there was no side cover on the Deutz to force the air between the pistons. Didn't care, came that way. It's probably still missing that cover today! And still running. Wouldn't that be the same as running with no water?
With the individual cylinders I think it was easier to work on. Parts were lighter and easier to handle, only had to replace a single cylinder if needed, not bore the whole block. Fuel pumps were a nice Bosch. The smallest one with a turbo I saw was the 6 cylinder 913 series. Most were direct injection but the W series had pre-combustion chamers, used mostly in mines, they were down on the power.
As someone mentioned they could not get the epa rating are/were phased out. There are still a lot of them out there running that I see all the time.