(If you copied the temperature volume plot off a stem cycle on to air, you get something like a Carnot Cycle. However, if you compare Steam Cycle vs Carnot Cycle Pressure vs Volume plot, they are massively different. Steam engines revert to water at the low temperature, so they have no energy expenditure to reset the volume.)
If you built an air engine like a steam engine, it would have an external source of heat. It would also need a cooling stage, because at some point you need unexpanded water again.
Hence the model of heat source and heat sink. Not fundamental of thermodynamics, but practical part of state change (liquid-vapor) engines.
