Hello; It is my understanding that nitro works by releasing oxygen when it burns, which makes for a bigger bang and supports better alcohol cumbustion. More nitro=more oxygen released=bigger bang. Nitro is also a powerful solvent, and in sufficient concentrations, will wash away the oil film that protects friction surfaces. I think that the potential is there for nitro to damage engines, but, like the lubricating oil in the fuel, it is constantly being flushed out of the engine by the total loss oil system our engines operate with.

So your friend has thought it through, and come to his conclusion through a logical process. It's just that experience doesn't prove his theory.