Your question is why are cars inefficient but it seems you want to blame it on the engine combustion? Modern Internal Combustion Engines are over 30% in their energy efficiency(not through the entire rev range) depending on brand. There's other factors that influence efficiency of a vehicle like:
Transmission - Automatics used to rob about 15-20% of energy. Now modern trannies like the ZF 8 Speed you see in a BMW suffer from losses about 10-12%. Usually, more gear is better as it can keep it within the rpm the engine is most efficient at. DCTs and CVTs are the most efficient taking only about 8% of energy but they are not that pleasant to drive with.
Aerodynamics - This is very important as speed limits are increasing and highway travel is so common. As you increase your speed, the amount of air resistance increases exponentially. At like 100 mph, most of the energy is going to be used to overcome air resistance.
Engine RPM range - As the RPMs increases or decreases, the amount of time for combustion is lower or higher. That means your valves(both intake and exhaust), cams, etc.. has to adjust with it. That's why you see things such as VTEC(Honda's version) that adjust the valve lift and cam timings to increase efficiency at different rpm range. The problem is that it isn't perfect and they can't make something that's perfect. From all the cars I've owned, I feel that Toyota VVTI and BMW Vanos are pretty solid and consistent even though Honda's version is the most popular.
What automakers are doing today?
Match engine characteristics with the correct transmission for optimal efficiency. Gear ratios, shift points, etc... all add up a few % here and there to make a big difference. The popular thing is improving the torque and efficiency of engines at low rpm and mate it with a transmission with a really last tall(they call it over drive). Voila! massive highway mileage improvement.
Improve thermal efficiency. Heat loss is energy loss. Simple as that.
Using Atkinson cycle engines. Atkinson cycles are more efficient but usually less responsive and doesn't make as much power. However, I have a 2014 Mazda 3S with a 2.5L Skyactiv engine making 185 hp running on the Atkinson cycle. Engineering seems to have overcame those obstacles.
Increasing compression ratio. This improves efficiency and power.
Making lighter wheels, less mass to rotate.
Lighter and less complicated drivetrain parts.
Dynamic AWD systems. Instead of spinning all 4 wheels and take penalties at all 4 wheels, it would default to just FWD or RWD in normal driving. That's why you see car reviewers describe certain AWD systems as RWD bias or FWD biased. My 2011 550i w/ XDrive is RWD biased while the Mazda CX-5 AWD is FWD biased.