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Friction and lack of a way to efficiently propel the front of the watercraft; it's all pushing from the rear. An exception would be catamaran sailboats, which in addition to the lateral resistance of wind in the angled sails also get some the lift reducing friction on the hull. World class racing catamarans can go 1.5 - 2x windspeed. There are also the cigarette racing boats, but then again, their motors lift so much of the hull out of the water that the friction is greatly reduced.
iceboats go one heck of a lot faster, thanks to minimal friction on the frozen water.
not uncommon to see iceboats reach 60+ mph in 20 mph winds.
I saw an old (1920's vintage) Class A iceboat, big enough to seat 5-6 people comfortably reclining in the cockpit, reach about 75 mph in slightly over 20 mph winds ... with 5 people on board. Probably faster in some of the gusts, but it was measured over a longer course and before GPS gear was available.
There's an anecdote about J.D. Rockefeller coming out to see land based trains vying for the world speed record one winter along the Hudson River. He came out with some friends to watch from his iceboat, and the winds were strong enough that day that he couldn't sail slowly enough to watch the trains.
At that, the world record for a sail propelled craft on water is now around 75 mph. A similar concept type of land based vehicle has now reached 125 mph. Both records set in the last year or two.
They can, just not in water. There are ground effect boats and hydroplanes that go amazingly fast.
Does water give more friction than roads and/or rail lines?
Yes, by far. Steel on steel has about the lowest coefficient of friction of any two materials. Pushing materials through water is one of the highest.
Are people not interested in ship engines that allow faster travel for cargo and passenger ships?
The oceans are not millponds. Swells of fifteen feet are common and some areas have swells and waves in the sixty foot range. Driving over a potholed road is annoying, driving over an ocean in a multi-ton vessel while dodging swells is impossible.
Wind resistance slows most cars at about 120 mph. It talkes a lot more power to move a car faster. Ships need an incredible amount of power just to move their massive bulk. On top of their own weight they also must move an almost equal(?) weight of water out of the way.
Note that this applies to vessels that travel on the water's surface. Military submarines from the United States and the Soviet Union are said unofficially to be able to achieve underwater speeds of 40-45 knots*. The British Spearfish torpedo reportedly travels at 80 knots, while a rumored new type of rocket-powered Russian torpedo reaches 200 knots.
* 1 knot is approximately 1.15 statute miles per hour.
Go for a walk down your street, then try to walk in a pool. That should tell you everything you need to know.
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