Yes, ultimately shedding the heat will be a difficult obsticle to overcome. JP Motorsport from Sweden has performance cylinder heads with added cooling fins over, and above what a stock VW Cylinder Head has, and LN Engineering has Aluminum Cylinders that dissipate the heat better than the stock Cast Iron VW Cylinders. These are expensive, extreme examples though.
I think Bob has made it into the upper 150's, and Zach Burns with his Karman Ghia has made it into the lower 140 range at Wilmington. I'm assuming these are only 1 mile passes, so it would be interesting to see what would be needed for a 5 mile run. Of my two examples the lower HP example is in a Street Driven Beetle. Although not practical, it is able to dissipate enough heat in that instance, but it would be much different at full throttle for 5 miles.