They are efficient at mid range RPM. Say, 3000-4500-ish. Generally speaking. They're biggest advantage: Quiet operation. Thats why many dedicated pleasure boats are I/O. I've had several. Maintenance intensive, compared to an outboard and also compared to an inboard-which isn't a lot different other than not having an outdrive to keep up with.
for pleasure use only in deeper waters, an I/O is hard to beat. OB's are less maintenance but noisier and use a little more fuel, and cheaper to work on if/when that time comes. Though, I will say this: Since the 4 stroke stuff has been getting more advanced, the differences in noise have been getting slimmer. But I still prefer an I/O just because that's what I grew up around. Last one I had was a 4.3L V6 GM engine. At idle it was almost silent. At cruise speed (~3000 RPM) it was quiet enough to hold a normal conversation without raising our voices much. I loved that boat.