Yes. At some touring car races, awd cars are not allowed due to unfair advantage. Do a search on AWD Unfair Advantage and you will come across old articles on Quattros being banned.
You are correct that AWD cars are heavier than non-AWD cars. However like the STi's case it is no heavier than a 2wd and in some cases even lighter! It's all about intelligent packaging. The weight penalty may not necessarily negate all of the AWD's performance.
If you watch one of the Speed Challenges race the Audi A4s are very competitive with the 3-series, TSX etc. And when it rains, the A4s disappears ahead of the pack. It's one of the few events where they mix up the drivetrain approaches.
You cannot compare a 4-wheel dyno with that of a 2-wheel dyno. They measure power delivery differently.
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Much like there are differences b/t say a dynojet vs a mustang vs dyno dynamics etc. You are discounting the fact that all four wheels are providing forward thrust while with a typical FWD, the rear wheels are there to just provide support so that the trunk will not drag on the ground.
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