The only reason it would be uncompetitive is because swapping the engine would land you in a class vs heavily modified cars. If i could put a 302 in a 1st gen rx7 and race vs nothing but other 1st gen rx7s...... there would be a lot of weedeater powered rx7s getting lapped.
Build one, and I will go grab a GSL-SE and do a few suspension mods, and we can go to the track. I'm pretty sure that I will be able to lap you in a session on Road A. 302 makes about 180-190 rwhp stock, and I can easily get a 13b up to 150-160 rwhp with minor effort.
"Racing is life. Anything before or after is just waiting." - Steve McQueen