from an engineers perspective...
u=friction coefficient between the pad & rotor, a function of both materials
N=Normal force, AKA the force pushing the rotor and pad surface together, caused by the caliper piston, reduced by any flex in the system
F=Force of friction, AKA the resultant braking force that slows the bike down
Looking at that equation, when the force applied by the caliper goes up, or the friction coefficient is increased, you get more braking force to slow you down.
The Normal force "N", may be substituted by: N=P/A
P=Pressure of the pad material on the rotor surface
A=Area of pad contacting rotor surface
Substituting terms the resulting equation can be written:
Reduce the area, the force of friction goes up, equating better stopping power. I think this is a gross oversimplification, I'm reluctant to fully believe in this w/o some hard testing data. What you can be sure of is that more heat per unit volume will end up into the rotor if more braking force "F" is achieved. You also have to have a sufficiently rigid and stiff fork/caliper mount to take advantage of additional braking force gains.
Also, when rotors get hot, they warp, misbehave, braking performance decreases, etc, etc.
In a track situation, the rotors will get used much more severely than your usual street situation. Barring the availability of any hard data, I would look at the SS rotors of the top team(s) that run in a series that allow complete rotor modification to determine the safe, useful, and appropriate level to modify your stock rotors.
But in the end, I think most of you guys would be better served putting your fat ass on a diet!