I've seen numerous cars that for one reason or another, retard timing excessively at wide open throttle - getting worse over time. Seat of the pants impression is that power drops off steeply as RPMs approach redline. OBD2 datalogging verifies this by showing timing in the low single digits. These are performance motors that are designed to live in this powerband and are usually modified to some extent. What steps would one take to determine the cause of this issue?
NOTE: the below assumes that you aren't talking about ECU-controlled cars that explicitly pull timing intentionally at high revs. In the spirit of checking the easy answers, you should check the map in the ECU.
If you're looking for measurable factors, there are two critical items that might trigger detonation and, therefore, convince the engine to pull timing: temperature and air-fuel ratio.
Temperature is measurable and, unsurprisingly, the best place to measure intake temps is near the intake manifold. Higher intake temps will cause the fuel mixture to ignite too soon. If temps are too high, seek ways to keep heat out of the intake air. Intake designs, wraps or routing are all possibilities.
Air-fuel ratio is less easy to measure but still straightforward. An air-fuel meter can be connected to a probe inserted in the exhaust pipe, into the a bung in the exhaust path, etc. If the mixture is too lean (more air, less fuel), the mixture is more likely to detonate early, in part because more fuel keeps the mixture a bit cooler. If the mixture is too lean, it might be an easy fix (maybe the injectors are too small) or more of a pain (you need to retune the air-fuel map).
If both of those are okay, you could be looking at a much harder problem to deal with. Examples include pistons that are too high compression or hot spots in the combustion chamber. Those are less likely, thankfully.
Factory turbocharged cars typically run very little timing on the top end (high RPM/high load) - so what you're seeing via logger may most likely be correct. Additionally to further confound the issue the factory also tunes A/F to a very conservatively rich value @ WOT. Those two factors alone will make a car feel "soft" at higher RPMs.
That's part of the reason why a talented tuner can effect so much change on some cars by merely applying tweaks to the fuel and ignition timing tables.
Some loggers give you the ability to log the amount of timing retard due to sensed knock (the knock sensor is picking up "something" real detonation or not) - that should be the first place you look to determine why you have low timing. Also many cheap OBD2 loggers have poor refresh rates so the timing you "see" may not be the correct value.
In addition to the other answers above:
If the air/fuel ratio is too far to the rich side, you can actually get rich knock... So, make sure it's correct, don't just add more fuel blindly.
Vibrations/noise in the engine bay can trigger false knock readings that will cause timing retard. I've seen more than one car that was tuned and working fine, right up until the owner decided to dump the exhaust out the bottom of the car, leave loose parts rattling around the engine bay, or put an obnoxiously loud muffler on the car...
Temporarily running a higher octane fuel will allow you to determine whether your fuel octane is insufficient for the performance of the engine and/or it's current tune. (For instance the timing may be too advanced for a low octane fuel). You could temporarily run 100 octane unleaded race gas and then compare your timing retard values.