Bugeater:
Real simple - when the car is in closed loop (high vacuum) the PCM controls the a/f by varying injector pulse. The input for this PCM control comes from the O2 sensors. The oem O2's are not wideband and only have resolution about one point above and below 14.7. Due to EPA constraints there is little need for the wideband O2's which are accurate several points above and below 14.7.
To continue - when you go WOT (low vacuum)the PCM does not use the O2 sensor input, instead it uses a fixed matrix (cells for timing and fuel that correspond to an rpm value). These are values that have been programmed by DC for what it believes are ideal. Ideal for a street car is not ideal for max hp.
The problem with a modded car is that the engine now breathes more efficiently in WOT and gets more air into the chamber relative to the amount of fuel that is fixed by the DC matrix in closed loop. In our engines this is especially true in mid range, thus, the reason a device like the VEC2 extracts so much more power from the engine in the mid range. All you have to do is bring the lean mixture down (enrichen) by adding more fuel in the midrange. The VEC2 also controls timing, but, that is a different topic for a another day.
This is where the aftermarket wideband O2 has value, this sensor can read a/f over a wide range and gives you a full 0-5 volt output for monitoring. It is not used for conrol of the PCM, but, for the purpose of plotting and tuning the a/f thru a device like the VEC2.