Well, I've played SHIII pretty extensively, and I can honestly say that (for me at least) SHIV has plenty of immersion too. I'm playing with the 1.1 patch and during my second patrol I ran in to a Japanese Task Force containing two fleet carriers (Shokaku and Hiryu class I think) and numerous escort carriers. I happened to be in their path, and after jinking and weaving a bit, I managed to get my boat in position for a shot at the two carriers. Full 10 torpedo salvo, 8 hits, two crippled carriers and one happy virtual submarine skipper. I got plastered by the escorts but managed to stay alive and finish of the carriers right under the destroyers' noses. I constantly got sonar reports from my sonar man, depth readings were called out in hushed voices etc. I almost got more immersion than I bargained for when I surfaced a bit prematurely, but I managed to slip away with minimal damage. It's not a perfect game by any means, but neither is SHIII.
