the advantages of AC servos with my thinking is speed, not cut speed, but speed regarding approach, plunge, and transfer all with improved resolution.
You probably already have all the resolution your Sherline can handle.
And you can get plenty of speed out of steppers, with the right steppers, drives and power supply voltage.
Get some Leadshine AM882's from Ebay, and some low inductance, high current steppers, and you'll get all the speed and power you need. And they'll run smoother, cooler and quieter than what you have.
I also want to say more torque is not what I am after.
You can't get more speed without more torque. Generally, acceleration requires more torque than cutting does.
Another advantage is to use the external hardware drivers which I know steppers have as well but steppers are just noisy and don't like to be pushed very fast, at least open loop anyway. Using driver boards seems to be the way to go for more modern computer options.
You can't push a closed loop stepper any faster than an open loop stepper. When an open loop stepper runs out of torque, it stalls. When a closed loop stepper runs out of torque, the drive will fault. There's no magical power reserve to kick in when it loses position.
And I think you are confusing drives and motion controllers.