My understanding, based on reading debate on this topic in other threads, is that N2 is not a requirement for the cascading pour, but makes life way easier. N2 is not (very) soluble in liquids, therefore making it ideal for pushing beer at high PSI (you don't have to be concerned with overcarbing and glasses full of foam). For the restrictor plate in a stout faucet to work properly, the beer must be pushed through at 30-35psi, and it is this high PSI + restrictor plate combo that makes the cascading tiny bubbles that we know and love. You can do this with CO2, but you'd have to crank the regulator up to 30-35psi for serving, and then crank it back down and bleed the pressure when you're done or else you'd end up waaaaay overcarbing.