TE Compensation Question

I've been flying gliders for years, but the following question only
occurred to me recently: In mechanically compensated varios, the TE
pressure is supposed to be as much below static as pitot is above
that. That makes sense since "ram air pressure" increases as v^2, as
does the kinetic energy of the ship. But pitot pressure is
proportional to IAS, whereas the kinetic energy of the ship would seem
to need TAS. If I haven't made a mistake (and please correct me if I
have), TE compensation will only be correct at one altitude. At higher
altitudes it will be under compensated, and at lower altitudes over
compensated. Comments please!

Martin