Its true that coral chips will become nitrate factories over time but not NO2 though... the reason being corals chips do not have anaerobic region for de-nitrifying bacteria to survive. Hence the corals chips can only break down NH4 to NO2 and then down to NO3 and stops there.. hence NO3 will increase... detritus is also another reason causing NO3 to increase. IMHO, i think its good to have another form of biological filtration is the sump so as to decrease the chances of a tank crash to the minimum. Even when a few fish die, there is enough bacterias in the corals chips/bio-balls etc to break down the dangerous NH4 and NO2. Its true that LRs will serve the same purpose, but there's only this amt of BB that the LRs can house and chances of a tank crash is definitely higher than that of a tank which uses biological filtration.
I also think filter floss is important as it traps the detritus.. otherwise where will the detritus goes? Back to the main tank or settle down to the bottom on the sump. Hence its the same problem of detritus. But as mentioned, need to change to filter floss regularly.
Personally, I'm slowly replacing my bio-balls with bio-home as bio-home has anaerobic regions to house de-nitrifying bacteria which bio-balls doesn't have. Not sure how effective it will be as its still in the process of replacement