Hiya Auto,
The general consensus of opinion is that the AutoStick clutch assembly is good for up to (about) 90 horsepower. That statement comes with other factors to consider.
The clutch for an AutoStick is relatively small. However the buffering it receives from the torque converter allows it to take an amazing amount of load and give an equally (if not more so) amount of service. It's not uncommon to pull a clutch disc from an AutoStick with well over 100,000 miles and find that it has much more service life. Try that with a manual! Driven normally, a larger engine should have no adverse effect on the AutoStick.
However, most any well thought out and well put together performance engine is going to give you some "plumbing" problems. None of this sort of problem is a deal breaker, but they do need consideration. For example, the AS control valve is dependent on a dual vacuum signal which comes from the stock carburetor and the stock intake manifold. A performance engine will likely ditch both these companents so that leaves the question of where you will find those vacuum signals. This is not a difficult problem to solve IF you know how the AutoStick components work.
To that end, I'd suggest that you replace your stock engine with another stock engine and get use the resulting time to get to know your AutoStick. You may find that the AutoStick suits your needs or you may find that a Type 3 with its fully automatic may be more suitable. Also use that time to gain the knowledge you'll need to do a successful engine upgrade. And who knows, you just might wind up liking the stock engine and its performance. In any event, just don't rush into a bigger engine. There are lots of details and potential costs to consider.
You may want to check in over at www.vwar.org for more AutoStick related information.
Mike
1970 AS Bug
1970 Bus - The Ruptured Duck