Here's some excellent reading I found. It doesn't tell you what the squish should be, but helps you understand the theory of how it works. It's not just about clearance, compression, and detonation.
The second paragraph adresses compression. It addresses my concerns with too much compression actually hurting performance.
Squish clearance is another important factor in head design. This is the clearance between the piston and the squish band of the head when the piston is at TDC. It has a strong influence on turbulence in the combustion chamber, which directly affects how fast the mixture burns. The old way of setting squish was to just make sure the piston didn't hit the head when running, but this is not the way it should be done. Like most engineering criteria, there is a correct range that needs to be targeted. Too much clearance, and the burning is slow and power is low; too little, and burning is too fast and puts extreme loads on the motor, similar to what detonation does. A correct value of maximum squish velocity, or MSV, will ensure good power output within safe limits. I use a computer program to calculate these values and ensure they are in the correct range. The factors that influence the MSV are RPMs, stroke, rod length, squish band width, squish clearance, and compression ratios. Only when all these factors are considered and adjusted can a head be considered well designed.
Compression is also important to consider when designing ports. Years ago, porting was targeted just at timing numbers for a desired RPM; if you wanted 10,000rpm, you needed 190 degrees of exhaust duration. Then a more accurate method became known, using port time-area values. These calculations suggested a target area range for ports to feed the motor at the desired RPMs, and was a big improvement. Further developments, and what is used now, uses the time-area values, but targets desired power output levels based on BMEP, or brake mean effective pressure. What this means, is that the motor needs more port if the compression is higher, even if the RPM's are not changed. So if you raise the compression on an engine and don't consider the port design, you may actually lose RPM capability. Conversely, if you have an engine with a lot of exhaust, it may respond well to a higher compression...as long as all the rest of the variables remain safe.