The ability to produce lots of children does not at all work against the ability of innovators and innovator probability to overcome their resource-extraction load.

I'm not following your terms here. Obviously the ability to produce lots of children does in fact sop up all the additional production, because that's why per capita incomes on net essentially do not change over thousands of years and instead populations may get bigger. So you can't mean that, but I don't know what you mean.

China and India (and the Islamic Empire) did innovate faster than the West, and averted many Malthusian overtakings along the way (probably reaching 800 years ahead at their zenith). Malthus would have known about this at the time.

They innovated faster at some points, arguably. And the innovation such as in farming techniques helped support a higher population - and a poorer population. Malthus would have known this about China, did, and used China as an example of a number of things, for example, the consequences of a subsistence wage which is close to starvation http://en.wikisource.org/wiki/An_Essay_on_the_Principle_of_Population/Chapter_VII :

The only true criterion of a real and permanent increase in the population of any country is the increase of the means of subsistence. But even, this criterion is subject to some slight variations which are, however, completely open to our view and observations. In some countries population appears to have been forced, that is, the people have been habituated by degrees to live almost upon the smallest possible quantity of food. There must have been periods in such counties when population increased permanently, without an increase in the means of subsistence. China seems to answer to this description. If the accounts we have of it are to be trusted, the lower classes of people are in the habit of living almost upon the smallest possible quantity of food and are glad to get any putrid offals that European labourers would rather starve than eat. The law in China which permits parents to expose their children has tended principally thus to force the population. A nation in this state must necessarily be subject to famines. Where a country is so populous in proportion to the means of subsistence that the average produce of it is but barely sufficient to support the lives of the inhabitants, any deficiency from the badness of seasons must be fatal.

Sure, it's just an example which does not seem to be impossible but where the blade of innovation is clearly bigger than the blade of population growth. But the basic empirical point remains the same: the world does not look like one where population growth drives innovation in a virtuous spiral or anything remotely close to that*.

* except, per Miller's final reply, in the very wealthiest countries post-demographic-transition where reproduction is sub-replacement and growth maybe even net negative like Japan and South Korea are approaching, then in these exceptional countries some more population growth may maximize innovation growth and increase rather than decrease per capita income.