It seems that many LS1 cars have maximum timing of around 28 degrees at full throttle, most Gen I engines seem to like around 34 - 36. Is this because EFI does a better job at atomising the fuel or is there something about Gen III that allows less timing?

 

L98's are Gen I with injection

I suspect it is the whole package given the only thing in common with a Gen I the badge on the valve cover.
The head design in itself flows exceptionally

 

it's mostly due to the cylinder head design.

the LS heads (especially the cathedral port heads) flow some pretty impressive #s and also have improved combustion chamber design over the
Gen I heads. The result is less ignition timing.

 

The chamber and head design is more efficient at cylinder fill and burn. Better the head usually less timing needed. Also most ls guys run pretty high dynamic comp so they wont take much timing to begin with on pump gas

That being said i have seen some high dynamic comp sbc's with fast burn chambers only need 28-30 deg wot