That's correct, Steve. The SCSI II specs do allow for the higher throughput, but in the case of the Zip drive, that is constrained by the disk I/O parameters themselves. IOW, they operate in a 5 MB/sec speed limit area, but don't have the HP to go that fast.
That's one reason I never went for a Zip drive in spite of their immense popularity. I opted for Syquest SCSI E-Z Drives instead - much faster even at SCSI I. I still have them, and they still work with a SCSI-Firewire converter. (Firewire is basically extracted from SCSI III.) Syequest Flyers and SyJets were SCSI III.
I then went to LS-120 drives and disks for higher volume archiving. Still have them and they still work.