Yeah. Less dense EPS foam would work better at reducing the severity of brain trauma for low-moderate impacts but would be less effective at preventing skull fracture for hard impacts. Might be a tradeoff worth making.
As far as twisting of the head (angular acceleration), yes it's bad, but I think that the typical cycling helmet is already somewhat free to rotate on the head and slides pretty readily on road surfaces so I don't know how much of an improvement could be made in that regard.
This reminds me of the first time I went roller skating. I grew up near a lake that froze over in the winter so did a lot of ice skating. Years later I went to a roller rink for the first time. Roller skating and ice skating are quite different, but most memorable was the first few times I fell and learned that you don't slide like you do falling on ice. Ouch.