Think of it like this. How do you think two 25hp brushless motors are able to move the gates of the Panama Canal? It's all mechanical advantage. Same strategy applies to vehicles, though they can't be geared too extreme since they operate at highway speeds.
The torque converter is the biggest piece of the pie though. By coupling at a higher rpm the engine has more leverage to move the vehicle, and it's much closer to operating at peak efficiency. Even with a stall of say 3000rpm, it won't cost too much in the way of economy in town. Modern converters can be built to be very stock-ish under normal driving, but retain the ability to flash to a higher stall speed if you want. Highway economy is unaffected since the converter clutch will be locked.
The torque converter is the biggest piece of the pie though. By coupling at a higher rpm the engine has more leverage to move the vehicle, and it's much closer to operating at peak efficiency. Even with a stall of say 3000rpm, it won't cost too much in the way of economy in town. Modern converters can be built to be very stock-ish under normal driving, but retain the ability to flash to a higher stall speed if you want. Highway economy is unaffected since the converter clutch will be locked.