I've had Subarus because I need a reliable wagon. Few choices in the decadent SUV era. Bought our Outback when our beloved '90 Legacy w/205,000 mi got stolen. Glad we got a '96 5speed, the only 2.2 L Outback ever. Great for camping/biking/ski trips but not so fun in town: too long for many urban parking spots, HUGE turning radius made tight spots even harder, big blind spots in the rear view. Would drive the smaller, nimbler Forester or Impreza if got better mpg (they don't!) and didn't have the troublesome 2.5 L. I'm a skilled winter driver & use winter tires, so I'd even do without AWD for the extra 2 mpg. Subaru's fuel economy will be unacceptable in the future era of $5 gas.
140 hp is plenty. Great shifter. Hill holder. Huge cargo floor. Great ground clearance! Rock solid reliability, maint cost only 6 cents/mi over 4 yrs. (My Jetta wagon has been 22 cents/mi!) Tight as a drum: NO squeaks and rattles even at 150k mark. My Subarus have been even better built than my Hondas.
Tighten up the turning radius. Improve handling w/load. Widen rear view mirror's scope beyond the D-pillars. Outback's mpg is OK for its size, but smaller Subarus should do better! Bring back the 2.2 L! Better mpg, and doesn't have the head gasket problems plaguing ALL 2.5 L Subarus up to present.