I don't understand when people refer to drive train loss in percentage. let's say my car is all stock and i have 200hp. so with your rule of thumb, drive train loss is 40 hp.
Let's now add some power to it on the same exact car with the same drive train and now has 400 hp. So I doubled the power to the car and all the sudden that same drive train that took 40hp before now some how takes 80hp? (400 x 20%)
It's more of a fixed value imo and not a percentage.
Now you can argue that it can take more power to turn the drive train because higher hp cars will create more heat compared to a lower hp car but I'm sure even if that is accounted for, it shouldn't take double the original amount.
Now, I do agree with you about loss in rotational mass will show an increase in hp on a dyno. What your effectively doing is not really MAKING more power but REDUCING the amount of drive train loss that the car sees due to the lower weight of the rotating masses.