I believe a lot of it is riding style. True, KTM's don't turn razor sharp like the newer Japanese MX bikes. I rode a YZ400 last year and this year I'm riding an '01 KTM 300 MXC and for sure the YZ cornered sharper than the KTM. The KTM is a bit lazy in the corners, but I've found that riding style plays a big part in that. My experience has shown that KTM's like a lot of throttle in the corners. I steer with the throttle a lot. The KTM's have such a smooth power delivery that you're able to get on the gas very quick in the corners and when you do that, the motorcycle will corner with anything out there.
But certainly, you can improve the handling by shortening the wheelbase and lowering the front end, as has been suggested here. I haven't tried the 18mm offset clamps, but everyone raves about them and claims that if you're willing to spend the money, that the handling will pretty much mimick a Japanese MX bike. I can't afford to buy those this year, but I've found that tweaking my riding style a hair has improved things a great deal. Good luck!