The water/oil cooler is more efficient that an air/water cooler. I imagine packaging would be a problem. With the a/w style cooler you'd have a larger radiator(oil radiator) and you'd have to have some way to insure air flow though it, like a fan. Id you check around, OE coolers are water/oil for these reasons. That's the same reason the AT fluid is cooled via the radiator rather than a separate cooler and aftermarket coolers often include a fan.