That's great, you're a chemist, but I doubt you know the exact workings of every bond and decomposition relationship of all the elements. Just like I'm in IT, I can't claim to know the workings of every piece of computer equipment in the world.
I however am not a chemist (apart from the 6 years of Chemistry at school ) but know exactly how the Nitrous Oxide in automotive applications work.
Nitrous Oxide doesn't break down into N2 and O... For every two moles of Nitrous Oxide (N2O) introduced to the cylinder, there are two moles of Nitrogen (N2) and one mole of Oxygen (O2)... It actually breaks down into 2N2 and O2, so there goes your whole argument.
2N2O -> 2N2 + O2
You are simply supplementing the amount of O2 in the cylinder that the engine can use to burn. It's very very very very simple.
"N2O is extremely stable, if not inert at room temperature"
Yes, but Nitrous isn't injected at room temperature is it? It's injected from the bottle usually in excess of 900psi and in a liquid form... When it hits atmospheric pressure, it immediately boils and causes a huge drop in intake temperatures.
Iodine, Hypochlorite, whatever... That has nothing to do with this and you're just waving your d1ck around trying to impress me aren't you?