The Healey community in the USA is a pretty big tent, and there is even a non-geographic chapter of the Austin-Healey Club of America specifically for significantly modified Healeys, mainly including those with non-original power plants. A few thoughts:
That car is not what I would do with mine, but there are cases of Healeys that were so badly wrecked or decayed and where so many original parts were missing (such as the drive train) that restoring them to original condition was impractical. Restoring them to non-original specs at least avoids writing them off completely. We really do not want to send any more to the crusher...
There is nothing sacred about the A90 engine of the original Healey Hundred. Let's remember that there were many shortages in post-war England, and engines in particular were in generally short supply. Builders had to take what they could get. The A90 is hardly anyone's idea of a high-performance engine adapted for a sports car. Good for Donald Healey for having made it work, but a cast iron lump putting out only 90 horsepower is no one's first choice for a sporting machine. If Donald Healey had had access to lighter and higher-performing powerplants in the early 1950s, I think we can be pretty sure that he would have used them.
Sports car are supposed to be performance-oriented, whether in handling or power or both. Things that improve handling and power are hard to criticize if you're building a <span style="font-style: italic">sports car</span>. If you're building/restoring an historic artifact, then of course you go with originality.
So while my own Healeys are pretty original (extremely so in the case of one of them and only slightly less extremely in the case of the other), I definitely do not turn up my nose at a well-built modified Healey. I try to appreciate it for its performance and engineering and often also for its appearance, and there are some people out there with a lot of talent for producing such machines.
So my bottom line is, "Not my thing, but not necessarily a bad thing either."