The reason for difference ‘base’ level for O2 between Oz and the USA is pretty simple and its a concept Mr Smith should understand, “Affordable Safety”.
You can fly around in Oz at 8,000’ and not hit a damn thing. There’s an awful lot of terrain above 10,000’ in the USA. Flying above 10,000’ but below 12,5000’ allows people in many areas of the USA to go flying without the expense of installing an O2 system.
The next fact is that you will have better O2 blood saturation at 10,000’ than 12,500’ feet. That’s incontrovertible. The level of impairment an individual may suffer, well that’s individual, but again, its a cost/benefit analysis isn’t it?
In Australia, there’s no pressing need to be above 10,000’ in your average piston engined single.
What’s the real benefit of cruising at 12,000’ compared to 10,000’ versus a possible hull loss from a hypoxic episode? Risk management 101.