They have good TE, but the fact that only one wheel produces effort and the rest just drag along works against it.
Effective TE in motion is always greater with diesel and electric.
Fun fact: max gradient that steam loco can climb is 1:37. Try figuring out where you have seen this figure :D
This is about linear approximation of nonlinear problem.
Banking of Roads/Centripetal Force ka concept lagta hai tumne nahi padha koi nahi Class 11th ki Physics ki NCERT dekh lena.