Why does a catback/midpipe lean out the engine?
 

As everyone knows, the O2 sensor is located on the downpipe and the O2 sensor is responsible for contorlling the air-fuel mixture. Now, since the midpipe and the catback are after the O2/downpipe, their effects should be minimal. Therefore, why would the addition of a CB and MP cause the engine to lean out?

You would have alot less backpressure causing your wastegates to work over time. It will get to a point your waste gates will not be able to let go of enough air and you'll over boost then you'll go BOOM and stay stranded somewhere. With a boost controller you (may) be able to get by. Yet I wouldnt suggest it.

Correct assumptions.

However, the O2 sensor input is only used in "closed-loop" (typically partial throttle) mode. In "open-loop" mode (full throttle and/or high rpm), the car bases it's fuel delivery off of fuel maps stored in the ECU - as the o2 sensor is not capable of being accurate in these conditions. Since the fuel maps are set to what a typical stock car would flow, air-wise, you end up injecting less fuel than needed.

This is a pretty standard setup in all modern EFI cars (Honda, Mazda, Nissan, Ford, whatever). The solution is an aftermarket programmable ECU or fuel-computer (Power FC, Tec II, MoTec, etc.).

ya forgot the mention the preset maps. woops =P

There is a much more simple way to explain it.

Many fuel injected vehicles measure the amount of air coming into the engine. When you provide more air (high flow intake, open exhaust, etc.) the engine computer sees more air and knows to add more fuel.

The Rx7 has no way to measure how much air is coming into the engine. The engine maps were designed with the intake restriction and exhaust backpressure from the stock pieces. If you significantly alter the balance (think of a see-saw in a playground) then you will have problems.

Simple, yet I never see it explained this way. It isn't some mystical rotary only thing. It is a simple matter of Mazda choosing to use an unmetered system to provide air to the engine.
(naturally, on a boosted engine it seems logical to measure the incoming air. Why Mazda did otherwise is a mystery to me)

At some point you will over do in on stock injectors as well.

This is true. Your duty cycles will be rather high above stock levels of boost. However, running a MP at 10-13psi shouldn't be a problem on stock injectors. This is a highly debatable topic, however that is MY area of comfort regarding the issue.