Homebrewer hit it right on the mark, good job!

Dave Gierke wrote a book "2-Stroke Glow Engines for Aircraft". He goes into detail explaning the relationships between nitro, compression ratios, glow plug heats and port timing and how they are all interrelated. After reading all his publications over the years and talking to him on many occasions, it all comes together and is actually simple to understand.
Once the concept of high compression = low/no nitro, low compression = some or high nitro. The relationship is not always arithmetic depending on many other factors involved with the engines design. Some lower compression engines will run very well on lower nitro if you put in a hotter plug. Some OS 2-strokes will run quite well on 5% or less when you remove the head shim and again, use a hotter plug.
Rossi's & MVVS' for instance, love 0%-5% nitro, high oil fuels, and actually start getting problimatic above 10% nitro.

NO, the engine manufacturers are not co-conspiritors with fuel manufacturers just to drive prices up. Americans and a couple other countries just like to use nitro in the fuel. It goes back a long time to guys like Dave Geirke, George Aldrich and many other icons of model engines when they kept trying to go faster. So engine companies designed engines to suit our tastes.

Great question, good one for a FAQ page.

Fuelman