i dont consider myself knowledgeable enough so i cant speak for the PD motors. Other than seeing darkside's drag videos... and god only knows how much time and money is under those hoods.
but your friend better have deeeep pockets to do that on a VE motor. it can and has been done, but the cost gets exponentially bigger when you do bottom end work which is typically needed somewhere around double the stock power.
thats not a rule or anything, just something ive noticed as far as when ppl decide they need to do rods and pistons.
another consideration is the clutch/trans. i dunno what kind of tranny he was going to put into a B1 but anything past 450ft lbs is just asking to wreck gearboxes.
without opening up the bottom end, i would say an ALH can do 180-200hp. The PD's 200hp+. im sure those numbers can be stretched upward, but to be on the safe side of reliable, thats my opinion
last thing i would say is that a B1 dasher is ~800lbs lighter than an A5 jetta that the BEW/BRM came in. he doesnt need 290hp and 500tq to make it move pretty fast. i think at 180-200HP, most ppl would be pretty happy with its quickness.