700R4's can also feature a lock-up converter which adds tremendously to the MPG. Without a lock-up torque converter, the converter just slips all the time losing power (and MPG) to heating the radiator... Also the faster you spin the engine the more power the engine needs to produce to overcome its own friction.
The trick is to gear the truck to match the peak efficiency of the engine (usually towards the middle/bottom of the peak torque lobe to allow for acceleration and loads). This requires matching the tire size, final drive ratio, and transmission gears to the engine's power band. Everything is a "system" in a vehicle, can't just change tire size without affecting something else...
As for fuel economy -
look at what the civilian hummer did with roughly the same drive train: 10-13MPG, so getting
anywhere north of that is terrific!! A M1009 with proper gearing and a 700R4 can get into the low 20's highway -
that even beats some current model year SUVs.