That's just the way discs are burnt. The outer ring of data is where the data physically ends - this distance is no different on a retail disc except you can't see the ring on a retail disc because the data is factory pressed and not burnt.
Theoretically the PS2 or any lens may have more difficulty reading a burned disc because the makeup of the discs surface is completely different to a pressed disc. That itself doesn't present any real complications however because it is a burnt disc, there may have been inaccuracies in copying/burning the data i.e. trying to copy from/to scratched disc, using a rubbish drive etc...
The data layer of a blank disc is made up of an optical dye which also presents a problem in that the data on dyes can start to fade over time, particulary with cheaper dyes or when exposed to sunlight.
Anywho to the point, if your PS2 isn't reading backups properly either A) your PS2 laser is dying, B) Problems with your modchip. C) Your DVD burner is starting to wear out or it's just rubbish or D) you are using rubbish discs or they are all scratched up. Usually it's A)...
Edit - tjas - I can't remember the specifics but basically the Gamecube expects the garbage data to be there - it actually reads the discs from the outside inwards, but DVD burners burn from the inside outwards, so essentially you are adding garbage data to the beginning of the image to push the data to the outside edge.
Gaisuto - Using swap magic does tend to scratch up discs - I guess it's because of all the swapping? Still it shouldn't really affect playback unless they are
really scratched. How old is your PS2?
