By reducing the amount of oxygen you are breathing the bodies ability to carry and utilise oxygen efficiently increases. When you then return to the norm of 21% O2 your body can use more of this oxygen to drive chemical reactions within it. In essence the altitude increases fitness by making you more efficient at utilising the O2 available. With regards to exercising at altitude this would of course be more beneficial than just sitting, as the body will have more adaptations when stressed. Hope that answers your question.