Nitromethane contains nitrogen dixoide (nitrite) and as such brings more oxygen to the chamber. The limiting factor in just about any internal combustion engine is how much air you can get into the cylinder(s). This is what turbo-boosters in cars doincrease airflow into the combustion chamber (and some cool the air down on the way in, making it more dense). One can almost always introduce more fuel into the mixture by turning up the fuel pump, or opening the needle valves as it were on our engines.
So when you increase nitromethane without opening up the needle valve, you are actually running the engine leaner because there is an immediate increase in the amount of available oxygen to burn the fuel. In order to compensate for this, one would have to open up the needle valve to allow more fuel in to get the fuel to air ratio back to an acceptable level.

The benefits of nitromethane are more power (because you are able to burn more fuel at once) and better idle (more oxygen available to burn the fuel, even when the carb barrel is almost closed.