I drove a 2.5 ltr TJ 40,000mi top to bottom on the Pan-Am.
That little engine was 120 hp and 140 ft. lbs. It was fantastic for my drive, I never had a single problem, even up at 16,000+ feet. Obviously it was not a speed monster, and I had to gear down to climb hills often, but I was very happy to get 20MPG day-in, day-out which gave a range of 375mi.
So this VW Diesel has almost identical hp, and 100 ft. lbs. more torque. I'll bet it's much better at climbing hills with that torque, and even if it gets 25MPG (conservative I think) that's a range of 475mi and I would have used about 400 gallons less diesel. Not to mention in a lot of countries, diesel was half price or less compared to gasoline.
At 30MPG, we're looking at 700 less gallons of diesel than the 2.5, and a range of 570mi.
Of course it depends on your use, but for what I did, I think you can see it's a good choice if you have a TJ in need of a new/rebuilt engine.
-Dan