Let me add a perspective from a structural engineer to your discussion. I am in Florida, where we routinely have near surface ground water. Water is encountered almost all the time when digging holes for foundations. Many times the contractor can't get the required compaction of the native sands, since they are too saturated. The response from the geotech is inevitably over excavated a foot and fill with crushed stone. Now, being someone who is used to dealing with hard materials (concrete, steel, etc), I really can't see how adding a layer of stone over a sponge will do anything to strenghthen that sponge. So I just don't see how this works. If they can't get compaction at the original surface, then why assume that if they dig a bit deeper (but not any wider) that they will be good for compaction.
I have questioned this but never gotten a really solid reason for doing it. Of course, my level of responsibility starts at the top of soil, and goes up. so if the building settles due to poor compaction, and the geotech engineer let it happen, then it is now my problem. I can show that my foundation is fine, and that the soils were the failure. So can someone here explain how this works?