Sam, It doesn't seem you've got a clue what you're talking about with regards to diesels.
It's significantly easier and cheaper to get massive initial gains. Usually the clutch breaks first, but then you'd be uprating that on a petrol setup anyway wouldn't you? I mean christ, remap, decat and you'll add stupid power to it.
With regards to a competitive setup, I can't understand how having to pay for less engine components and the same amount of chassis work would make any difference whatsoever. Black smoke racing really pushed the limits just because lulz, hence the trick car. The early BSR car was essentially a standard engine with a truck turbo bolted to it.
As for the smells, there really arent any. Theres a lot of smoke when it's spooling the turbo up but at the end of the day if it's being drifted why are you worrying about smoke & bad smells?
Three reasons, one completely potato post.