Adding EGR gas to the cylinder may cool it down and allow the engine to advance the timing, but you also have replaced air/fuel mix with non combustable gas which reduces power. What you are saying is: optimal air/fuel mix will not net more power than the increase in timing will provide. Mind you I am speaking about having the EEC programmed to not use an EGR. I seriously doubt an EGR enabled engine is going to ever outperform an EGR disabled EEC reprogrammed engine.Either Both would make the same, or the one with the EGR would be on top. Not to mention the engine with the functioning EGR would get way better gas mileage.
The main difference with tuning would be the one with the EGR could run more timing, which usually results in better performance.
EDIT - Just noticed msilver response.
In my own words --
The air is replaced with exhaust that will not burn again. Because of this, and when introduced back into the combustion chamber, (replaces a small amount of incoming air) the combustion chamber temp is lowered. Because of this new lower temp, more timing can be run. And because more timing can be run, more performance and better gas mileage is achieved. This new lower temp, more timing combination USUALLY offsets the more air, more gas combination.
So my vote is for the engine running an EGR valve.