Barring vac leaks or mechanical damage beyond simple wear, I'd do a seafoam treatment in the crankcase to loosen up the sludge in the oil rings, guessing the problem is the same as with vw gas engines - the oil control rings get plugged up with sludge and lose the ability to control the oil that needs to be scraped off the cylinder walls.
Maybe two or more sessions of seafoam. There are commercial treatments, one by bg comes to mind but they're really expensive and must be done at one of their dealers, hence why I say use seafoam. And mebbe some in the tank for good measure. Do a few cheap oil changes with seafoam treatments and see if that helps. I'm a seafoamer that has proven to myself it's good stuff and won't hurt the engine while cleaning it, just follow directions. I watched a few tests of additives like seafoam and it worked as well as the others but some did really nasty things to the rubber gloves being worn by the tester, that let me know I didn't want that stuff anywhere near my engine for fear of what it would do to certain types of rubber. The following vids address the subject;
I'd try anything before dumping the engine and replacing it with another.
As a last resort I would also do a restore treatment as seen in the following vid;
If there's damage beyond typical wear or stuck oil control rings your options are rebuild or replace.
My own experience with restore involves a 1992 Ranger where I used an entire v8 can of the stuff (more is better right?) and it ended up packed like cake in the oil pickup and starved the engine of oil on a cold Nebraska morning. Follow the directions, use the right amount or suffer the consequences. That said, the restore sold today seems to be much finer particulates compared to my memory of the stuff back in the late 90s I put in that poor ranger. I used some in my Jetta 2.0 gasser, figuring after 204k miles it might use some help in sealing cylinders, rings, and valve train, but I remembered the ranger and that made me hesitant. Making sure the engine was hot before I added it to the oil and only putting in half the bottle for a 4 or 6 cylinder and driving a few hundred miles, then adding the rest and doing the same. I only did this once to the Jetta but it runs fine, starts like it wants to run, and I did the restore thing to it 4 years ago with no issues. I was concerned about doing it to the jetta because vw likes to put fine metal screens in engine oil passages so was concerned about plugging these screen up, but after 70k miles it still runs fine and doesn't burn oil, let alone leak it. I do use seafoam before every oil change and I suspect that is why it doesn't have the all too common oil burning issue wich I presume is solely from stuck oil control rings. What i mean by stuck is the oil gets coked up behind the rings and doesn;t let them rotate or expand much, and also blocks the freaking oil drainback holes drilled into the pistons. Once that happens there's no place for the oil screped off the cylinders to go but get pushed up into the combustion chamber and then out the exhaust valve to coat cats and everything else on the way out the muffler. Just some ideas for ya.