The big gains in fuel efficiency are behind us. Used to be a typical car averaged say 12 mpg combined highway/local driving. Then it jumped to 18-22 mpg. Now the automakers are using every kind of expensive gimmick as well as drastic weight reductions to squeeze a few marginal mpgs more to meet congressional mandated fleet mileage figures.
In addition, many of these little sedans can transport more that 2 adults and 2 children making the car of low utility except for basic work commutes.
Yes the low hanging fruit has been picked.
My new Chevy Cruze Eco gets similar mileage to my 15 yr old Saturn - about 40 mpg highway.
The Cruze is actually about 400lb heavier though, and it is far quieter and smoother riding, and likely much more crashworthy.