I'll back fill with some additional history and politics. Gotta take you guys back to 1982 and earlier. Of course, not knowing your ages, I might even have to assume that some of you guys were not even born yet.
GM had introduced the converted 350 CID gas engine diesel in some of it's cars around 1980 or so. (I'm not a big GM fan, so my history here is pretty inacurate). These engines were fair sellers, but the sales were stiffeled by many problems that they had, and they were pulled off the market. GM recognized that they needed an original design, so they turned to Detroit Diesel which they owned at the time, to assist with a design for a replacement. This led to the development of the 6.2L, which was a significant improvement over the 350, but still not real great. GM had pretty much scared the car buying public away from diesels with the 350 fiasco, so the 6.2 was put in pickups in hopes that the commercial arena, which was already intimate with diesels, would pick it up and prove that it would work out. This led to limited sales to the general public. Ford had been watching all this with great interest, and when GM announced a diesel pickup, Ford had no choice but to respond. They knew that they could not field a diesel on their own, and needed to select an engine that had a proven track record. International Harvester had been using a motor developed for their school buses and small dump trucks and utility vehicles, and it was holding up well, so they struck a deal and started selling the IH 6.9L engine in pickups beginning with the aforementioned 1983 model year. The engine would not fit in a pickup as it was, so it was necessary to redesign the oil pan, air cleaner, and right side exhaust manifold, along with the fuel filter bracket and accessories in order to stuff it under the hood of a F-series truck. Because of the weight, you could only get the diesel in an F-250HD or higher. I ordered my F-250HD in April of 1983, and recieved it in July. It was the first Ford Diesel Pickup that my dealer had ever sold. It will turn 22 this year. Sales were light at first, but as the reputation grew, so did the sales. By 1986, there was not an ambulance, tow truck, roll back, or airport shuttle that wasn't 6.9 powered. Since I bought mine with the intent of keeping the milage low, I had an advantage. I got to watch what happened to the other ones. Several problems which would become well known started to spring up. Manual trucks were suffering from throw out bearing galling, causing high pedal effort and a multitude of clutch problems. The big problem though, was head gasket water seepage, caused by the head bolts relaxing and lifting the rear corners of the heads, which were running a little hotter thanks to the CDR valve feeding the back two cylinders a bit of oil. The head gaskets were subsequently redesigned 3 times. (for more on that, click
HERE. The other problem with the 6.9's were the valve stem seals, which allowed the engines to consume a bit of oil. Other than that, they were mechanically sound engines. By 1986, arch rival GM had suffered at the hands of the 6.9, and they positioned themselves to release their new engine, the 6.5L. Ford saw this coming, and IH (now known as Navistar, since selling their farm division to rival Case, in 1985) moved to produce the 7.3. Some of the weaknesses in the 6.9 had been analyzed, and the final year of 6.9L production saw some interesting twists. They began to test the 7.3L glow plug system and drive train on the 6.9's! Consequently, there are a few 6.9's around that have things that are not normally found on them, such as the 7.3L glow plug system, dual mass flywheels, and 5 speed manual transmissions. 1987 was the change over year, and by 88 the 7.3L version was released. IH build this engine by boring out a 6.9, increasing the size of the headbolts, and makeing some other slight changes to address new EPA concerns that were coming out. What Ford didn't realize however, was that by boring out the cylinders, that would open the pandora's box of cylinder cavatation. Those who bought early 7.3's suffered the most, as their trucks began to fail in record numbers in major ways, and talks of class action law suits began. Ford did not address the cavitation issue, until the mid 90's when they began putting in supplimental coolant additive addendums to the users manual, and training their dealers on the issue. By 1994, Ford and Navistar had realized the error of their ways with the 7.3, and pressed for the introduction of the Powerstroke. GM however, had begun to turbo charge the 6.5L, and Ford needed to add turbo power to it's linup right away. This was addressed by getting turbo manufacture ATS, to begin supplying Navistar with turbo kits, that were applied at the Factory. So in 1993, you could get a NA or Turbo version of the 7.3IDI. However, press hype for the PSD was already in motion, and the PSD did not have significantly higher horsepower numbers than what a turbo IDI could produce, so the injection pumps of the turbo IDI's were kept turned down, and an impairing down pipe ensured that anyone who tried to turn one up, would not get good results. This resulted in a sales floor conundrum of trying to sell at turbo equipped engine with a higher cost, and yet only making 10HP more than the NA version. So, when 1994 rolled around, you had the choice of buying a 7.3 NA, 7.3 turbo, or 7.3 PSD. Naturally the new, unproven PSD, had a good 50 HP or so over the IDI's, making them a natural choice and allowing the now cursed 7.3 IDI to fade from the catalog. I suspect you younger guys can pick up the story from there. As a final comment, my model A 6.9L was delievered with 170HP. HP figures would range from 155HP to 175HP depending on model year and altitude calibration. When the truck was delivered it had 3 miles on it. By the time I picked it up, it had 11. Every mechanic had taken a ride in it, and they were all VERY impressed. Most thought the engine was too powerfull for a pickup, and I was warned it would be hard to stop (high brake pedal effort in a panic stop). This was addressed in later years.
(on edit... not sure why that URL link won't work. There is an article I wrote over on TDS that can be found under Contents, 6.9 and 7.3 Tips, then click the first article, 6.9L gasket and turbo install.)