Automatic transmissions and hyrostats have different applications. Hydrostatic transmissions are great when the demand for power is fairly constant, and there's not a lot of variation in speed. Open the throttle wide, pick the speed and go. An automotive transmission has to respond to much wider variations of power and speed. And it needs to respond almost instantly when there's a demand for power. Think about when you speed up to pass another vehicle: You need to simultaneously go to full throttle and downshift to a lower gear. An automotive automatic transmission will shift to the appropriate gear when more power is needed, and the driver just has to deal with one power control, the accelerator pedal. Now think about doing it with a hydrostat: You have to simultaneously open the throttle and reduce the transmission speed control, then increase the speed control as the vehicle accelerates. It's the same as you would do with a manual transmission, except you have to adjust the speed control constantly with a hydrostat rather than just make a couple of gear changes with the manual.
Modern automatic transmissions are ridiculously efficient. With as many as eight speeds plus torque converter lockup, they give up very little in efficiency to continuously variable transmissions, which is why CVTs haven't really taken off.
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