This is something I don't understand. If the purpose of the rocks being porous is to create more surface areas for bacteria to grow, why would Bio Balls and Ceremic rings be considered Nitrate Factories since they simply provide more surface area for the bacteria?

the surface area you are after with LR, is the area deep within the LR

you want the to promote the anaerobic bacteria, these are what reduce your nitrates
the bacteria that live on the bio balls/wheels and such are aerobic, these bacteria convert nitrite into nitrate.

check out the substrate podcast shows, they discuss this in depth. they talk about it in regards to DSBs, but same applies to LR
http://www.talkingreef.com/forums/podcast-episodes/188-substrates-pt1-podcast-episode-27-a.html
http://www.talkingreef.com/forums/podcast-episodes/215-substrates-pt2-podcast-episode-28-a.html