I fully understand the nitrogen cycle, but short of some detritus trapped in the media (which would otherwise be trapped in Live Rock) the nitrate can only come from ammonia already present in the tank. The ceramic media does not create ammonia.
Now anerobic bacteria (the ones that break down nitrate to nitrogen) populate and spread at 1/5th to 1/6th the rate of aerobic bacteria (the ones that break down ammonia and nitrite to nitrate). So your filtration will be able to break everything down to nitrate faster than it will be able to break nitrate down to nitrogen, thus leading to increased nitrates.
This is my point, the ceramic is converting the ammonia down quicker, therefore stopping the ammonia or nitrite being present in the system. Surely this would be better? So long as you are prepared to maintain your media, the ceramics would allow for better filtration all round. Surely having higher nitrates is better than higher ammonia? Nitrates have been shown to only affect marine fish (no info on inverts) when levels are consistently higher than 100ppm. Ammonia can do it at less than 1ppm.
To make it easier, I shall break down the argument, imagine two identical tanks, identically stocked, one with lots of LR, the other identical but with ceramic media and you are finding nitrate readings in the ceramic one:
1) The tanks create ammonia;
2) This ammonia is converted by the ceramic media through nitrite into nitrate faster than the live rock can;
3) Therefore, one can fairly safely assume, that since the live rock tank is not registering nitrates it is not converting the ammonia quick enough for nitrates to show before it is processed by the anoxic bacteria
(more common to find anoxic than anaerobic bacteria doing this work) into nitrogen gas;
4) One can hypothesise from the above, that when LR alone is doing the filtering, the ammonia and nitrite are present for longer as both tanks are processing the ammonia at the same rate, but the tank with LR only never shows nitrate.
My original belief still stands, they only become nitrate factories when people stop maintaining them. Like the hundreds of people who heard that wet/dry filters are the best, installed them and never looked at them again. From there stems the belief, and from there on in it grows.
Based on this I think the above numbered points would most likely not happen; I feel both tanks would register 0 nitrates. It is only once someone stops maintaining the tank problems would occur. I just cannot see where the ceramic media would generate this extra ammonia to convert into nitrate that the Live Rock does not experience...
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Edit
Mechanical filtration converts nothing, it purely removes waste from the water through mechanical rather than chemical or biological means (catching food in filter floss for example).
I believe you are confusing aerobic bacterial filtration for mechanical.
