I thought added weight improves handling?
Not when it's all up front. The weight distribution would probably be close to 75/25 after the swap (tranny isn't light, either). Good for acceleration because all the weight's up front, but horrible for turning. You'll understeer all over the place. The ideal weight distribution for handling is 50/50, but will hurt all out FWD acceleration (better for RWD, though)
Too bad they don't have 3S-GTEs in aluminum like the VVTis.
The reason the 3S-GTE can handle so much power is because it's an iron block. Changing it into an aluminum block would just handicap the engine's potential.