The problem is probably workbench and not the filesystem
I agree with you there. Workbench takes a long time to render 1000 icons. The problem is worse if using the "Show All Files" option when DefIcons is running since DefIcons will load the first block of every file to determine which icon to use.
(although I'd go with more buffers and larger block size, myself)
More buffers, certainly, but using a larger block size to speed performance may be a peculiarity specific to FFS. In my experience, a block size larger than 512 makes SFS slow down, not speed up.