R is interpreted and dynamically typed, so when you declare a variable, the interpreter has to do some bookkeeping to figure out the type of the variable, allocate memory for it and so on.
If you write a loop by hand, the interpreter has to do this bookkeeping once for each iteration.
If you write your code in vectorised form, the interpreter can sort out the bookkeeping once and then hand over to the lower-level code (C or Fortran) the vectorised functions are interpreted in.
This can also be further optimised to take advantage of processor vector instructions, parallel processing etc.
So I'm afraid we can't have our pie and eat it. If we want an interpreted language with somewhat intuitive notation, then it has to have crappy slow loops. If we want a language with fast loops we have to rely on C or Fortran and forget about vectorised notation.
