Nitrous is an oxidizer. As in rocket fuel oxidizer.
Do you recall the HS chemlab where the teacher put the burning Steel wool in the flow of Oxygen? There was a wee bit of oil in the steel wool and it took out the front row.
Nitrous is as good at accelerating burn as straight oxygen - for safety purposes.
Add a much larger source of oil and other flammable bits, plenty of heat, and the Oxidizer UNDER PRESSURE - and you don't technically have an explosion risk, you have a very high-speed and complete burn risk. By complete we mean ignites and sustains Aluminum fires burn.
IF the NOS tank were to vent unregulated you would have a very nice (and short) bonfire.
~while not Technically an explosion risk, the results from what can happen are quite similar - dragsters whose engines go "over the top" on mix can send the cylinder heads quite far... on METERED amounts of NOS.
some of the reasons you can use NOS on a drag strip is that there are strict limitations on how much is carried AND there is very little (comparative) risk of multi-car contact... "Acceptable risk" considering the other risks involved in Drag racing.
I could go on, but yeah - explosion risk if you want to put it in lay-terms.