This is a question I've been considering.
With dynamic timing advance, even a stock 10.5 motor can achieve mod level rpms. Their relative lack of torque is offset by the gearing, with quite high FDR to make them rev more.
They'll definitely run hotter, as increasing timing reduces efficiency and thus increases heat, but with the right boost settings (say, incremental timing advance per RPM bands, to give a smooth power boost), there's no reason they won't perform just the same.
I'd like to see some maths on it, especially the torque comparison of a mod motor with moderate FDR versus a stock motor with high FDR.
One touring car racer I know compared a 3.5T (no boost, that would pop any speedo!) to a 10.5T boosted to the rafters; his conclusion was at the top end, there was no real difference (both are crazy fast!), but the 3.5T felt like it was trying to pull up the carpet (massively more torque). In 2wd buggies, you'd be using at most a 6.5T, and you'll have a slipper clutch spinning away much of that torque anyway.
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