That's a nice summary of the "back of the napkin" theory, but things get a bit more complex when you recognize that the fuel/air ratio matters, with lean mixtures ( less fuel vapor relative to air ) being more likely to detonate at any given level of compression. And it's the mass ratio that matters, not the volume ratio, so that's where things get interesting in adjusting for the more dilute air at high elevation. Don't forget the proportion of oxygen in air doesn't change with elevation, all the constituent gases become more dilute. ( But other added gasses, such as water vapor, will reduce the relative amount of oxygen in air at any elevation... this is a manifestation of the law of partial
pressures ). And ambient temperature matters for a variety of reasons.
But all of this blather aside, at the end of the day it's the metering systems of the air and fuel intake systems that determine how much air and fuel enter the combustion chamber before the valves close and the piston starts compressing the mixture. So it's not really so obvious that lower ambient air pressure will produce an inherently less explosive mixture upon compression in a modern internal combustion engine.
But it makes a good story if you want to sell cheap fuel for a tidy profit at higher elevation, doesn't it?
Anyway, I completely agree that advanced computerized engine controls are capable of dealing with fuels that that have a slightly higher propensity for premature and uncontrolled ignition. Within limits. But there is always someone who wants to make a quick buck by pushing those limits too far.