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You should actually not lose any vertical space when going from 4:3 to 16:9 since all its doing is giving you extra space on the sides.
The only time you do, is when the game does not actually render in "widescreen" and instead zooms in to fill out the wide screen display, cutting off the top and/or bottom of the original render.
The other option is to "stretch" the render to fill in the sides...which obviously makes everthing looked "squished" or "stretched".
Ideally, a game should render in 16:10 by default, and crop down to fit your monitor's need without needing the game space itself to suffer from the change in resolutuion viewing; making sure that a 4:3 is adequate ( though 4:3 is 'widely' outdated by now...but there are still some users ).
The question is...which way does the game actually utilize its screen space.