Ksurf
You are correct.... Your point is valid for portsmouth systems. Each data point is dependent on the other boats in the fleet. So... you have to make sure the basic assumptions for the race were met... All boats were in Active one design classes, all boats in racing form with race sails, etc. The N20 class has stopped one design NAs.... so... you could expect the PN rating to drift higher relative to the fleet. This is a problem.

The measurement systems have to decide whether the formula is useful in the real world... IE do the ratings reflect reality. Ie optimal potential... If they don't ... the formula needs work. Since the N20 measurement specs have not changed.. the formula would not have been adjusted.. However, development of better square top sails, longer High aspect boards and low boat weighs were measured factors that the formula did not consider. Also the top sailors world wide race in this fleet. The results on the water indicated the F18 was faster then original SCHRS rating by 5%. A lot of work was done to determine how much faster then the old rating and how the formula should evolve to handicap all cats to have as level a playing field as possible with a single measurement formuula. This adjustment process is very different then your example of classes loosing their racing form and then adjusting their rating higher.