KTM has been making road-legal bikes ever since they opened, so I'm sorry to say that magazine article is a little short sighted. Here's a 1970's example
This bike would give anything between 24 hp (early '70s) and 32-34 hp in its heyday)
Notice the size of the cooling fins on the cylinder !!!
As for the "modern" Duke; it's a 125cc alright, designed in Austria but assembled ni India with the engine courtesy of Bajaj, of whom KTM are prime shareholders.
The other major shareholder is Piaggio, so guess what ? Bajaj also make the Vespa
The KTM Duke is designed for a 250 cc engine, but it was marketed with the 125 cc plant first because 125cc is the legal max fior the 16-18 y.o. age window.
No car for Tommy in High School, you want wheels? 125cc is the max you get.
So 1255cc is a very agressive market, where anybody and everybody want a slice of the cake.
That's why in Europe the most sophisticated designs come in the smaller packages.
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