Hyabusa engines are fairly reliable once you fix the weak spots (chain tensioner recalled twice by Suzuki, oil pump tends to be a bit chocolate as does the starter motor gears) and like most big bike engines it needs dry sumping. If anything I'd say that a Blackbird engine is less trouble (IF IT'S DRY SUMPED). The key to bike engines is keeping good oil pressure - if you can make sure that the OP's good, then they're pretty bullet-proof.
However, getting more power out of one is not easy. Getting more power out of most car engines is easy because they're in such a mild state of tune already. Bike engines like the 'busas and 'birds are already very highly tuned. To get up to 200bhp is going to require a big bore conversion, cams and a ported head - around £2k-£3k fitted. Given that the engine only costs £2.5k-£3k, that's a disproportionately high figure for only a few ponies.
Why aren't they seen around more? Well, they are. There are plenty of Westies, Furies, Rushes etc. out there with 'busa engines. There are very few in Caterhams because by and large (Noger and Adam being honourable exceptions) Caterham owners tend to stick with whatever engines Caterham use rather than sticking in whatever they fancy. The 'busa is an extremely popular engine in other vehicles, which goes some way to explaining the relatively high prices.
A £5k conversion would be just about possible in parts alone, but obviously if you get someone else to do the conversion you're going to have to add labour to that. A top end budget of £10k wouldn't be unreasonable IMHO.
Why aren't V-twins used? Well, they are sometimes - Stuart Taylor have done at least a couple of Honda V-twin cars including one racer. They also use the PanEuro ST1100 V4 in some cars (my brother's put on in a Stuart Taylor Locost). But the bottom line is that they don't produce the power. The V-twins produce about 120bhp max - a decent inline 4 like an R1 or a GSXR1000 is producing at least 150bhp.
The power delivery of the twins is different - a chap called Ian Fletcher drives a homemade special in the 750MC RGB series with a V-twin in it and by all accounts he gets pretty good drive out of the corners. However, he's down on power on the straights. If you want bang per buck, a V-Twin doesn't make sense. And if you want torque, buy a tractor. Or a watermill.
Dan