It's been done (probably at great effort and expense).
Guy rode one at the, "Roll the Bones" Rally in Texas a couple of years ago.
The newly-released Kawasaki Z650, with its neo-Versys/neo-Ninja twin engine, boasts nearly 60 rear-wheel horsepower (Motorcycle Consumer News test), 6-speed transmission, assist/slipper clutch . . .
Should be an excellent power plant for a KLR, IMHO; YMMV. Hardly a, "plug-'n'-play conversion, but one of promising potential performance, I'd think.
DPelletier has a point; a KTM690 has nearly 70 horsepower (I think, didn't look it up), six speeds, and . . . claimed dry weight of 305 pounds . . . plus ABS. Probably attainable at lower cost than implanting a Versys engine in a KLR . . .
EDIT: Just finally looked at the link DPelletier posted above; think that's possibly the guy at Roll the Bones; was from Corpus Christi, I believe. Very sanitary conversion, no ground clearance sacrifice (Z650 is 5.25"). I LOVE the 180-degree cranked Versys engine; oh, what a loping sound it makes!