I agree. A friend of mine put one in his 1st gen runner, and it is underpowered. Only gets low to mid 20s for mpg. I drove it around town, and it does ok, but on the highway it sucks.
A bigger heavier truck like the 3rd gen needs a power plant with some more spank. The 1KZ-TE is a good engine (130hp, 220 ft/lb)... I almost swapped one into mine, before deciding that the 3.4 is just too reliable an engine to discard. If any of you guys want a KZ-TE, I can tell you where to get them at a decent price, and can also direct you to a couple of folks who could do the swap for you... it would take about 6 months (they have day jobs). Another option I considered is the Cummins B3.3, but the engine is still new enough that folks have not figured out how to reliably get more power out of it without hurting longevity or grossly effecting mpgs. All the information you will ever need about diesel swaps here and here.
2L-TE is archaic. If you want to go diesel, go with a 1 wire. 4BT rocks, but is a huge engine for a 3rd gen. I wish we could get the new Hilux trucks with the D4D over here.