Aren’t you gaining more lag with the added horsepower though?
Simple answer is yes, BUT, the amount of lag depends on a lot of things, from the turbo size to the torque converter and how much you can bring the RPMs up before launching. In fact, if they can retain the launch control this COULD potentially get around almost all turbo lag since it allows you to bring the RPMs up.
Or yes, a bi turbo could get around it as well, or even a small shot of nitrous to get off the line.
A lot of it depends on the build purpose, if its for road course / autocross racing or around town use, a smaller turbo will be fine, you will be able to drastically improve efficiency & still have plenty of low end power. If its a drag setup, go big, reduce the lag as much as possible with the torque converter and/or launch control and hold on... (for example of big and fast, see Harrison's 8 second WK1 turbo Jeep!)
But you are correct, they
might lose a couple tenths in 0-60 passes because of lag, but they will more than make up for it in 1/8 mile, 1/4 mile and top end runs.