Why better electric propulsion does not solve the hydrofoil's mission problem

Does modern diesel-electric or direct-electric propulsion make naval hydrofoils more viable?

Not by itself. The persistent problem is finding a mission that values their speed enough to accept small size, rough-weather limits, and a narrow operating envelope.

Electric machinery may simplify parts of the power train, but it does not change the fact that useful hydrofoils tend to be relatively small. Patrol boats are often needed precisely when seas are rough, a condition that reduces the hydrofoil's advantage. Larger attack craft still face payload and endurance limits while competing with conventional fast boats. Hovercraft survive because they solve distinctive access problems; hydrofoils look fast and impressive but struggle to deliver an equally indispensable mission.