> A) the highest performance aircraft were all liquid cooled

Well, how do you define high performance? Judging by speed at least, Tempest Mk II, Sea Fury, Bearcat, and P-47M are among the fastest piston engined planes ever made.

> B) combat aircraft have to deal with bullet holes

Sure. But an engine that lacks a critical subsystem by design (say, a liquid cooling system with pumps, pipes, radiators etc.), all else being equal, is less failure prone than an engine that has it. Whether that failure happens due to shells or mechanical failure.