One big limitation is the Carnot efficiency - for any heat engine (which internal combustion engines are) there's a maximum upper bound on the efficiency, which

One big limitation is the Carnot efficiency - for any heat engine (which internal combustion engines are) there's a maximum upper bound on the efficiency, which for gasoline and diesel is around 37%. Beyond that point you can't extract any more energy out of the waste heat without removing energy from somewhere else in the system.