In a perfect world, the combustion area would be a sphere with the flame front starting in the center. Obviously that is not practical.
Certainly for emissions purposes, the squish area should be large as possible, as that is where much of the slow combustion occurs at.
But... I'm not absolutely sure it makes a huge difference with a turbo diesel for racing. I've run .080" headspace and got about the same performance as .020". I run it about .005-.010 more than stock to allow for extra insurance when the piston gets really hot.