The only $(x,y,z)$ is $(\frac12,\frac12,\frac12)$.
For all other $x,y,z \in (0,1)$ the left-hand side is larger.
We prove this by showing that if we fix the average $a=\frac13(x+y+z)$ then
(i) the left-hand side is minimized when $x=y=z=a$, while
(ii) the right-hand side is maximized when $x=y=z=a$.
Hence it is enough to show the claimed inequality when $x=y=z=a$, which is
$$
\left(a + \frac1{2a} - 1\right)^3 \geq (1-a)^3
$$
with equality iff $a=1/2$. Equivalently, we claim
$a + \frac1{2a} - 1 \geq 1-a$ with the same equality condition;
and this easy because the difference between the sides is $(2a-1)^2/(2a)$.
It remains to prove assertions (i) and (ii). For (i),
the OP already noted that each factor is bounded below by $\sqrt 2 - 1$,
so in particular the factors are all positive.
We compute that $\log(x + \frac1{2x} - 1)$ is convex upwards by calculating
$$
\frac{d^2}{dx^2} \log\left(x + \frac1{2x} - 1\right)
= \frac{1-4x+8x^2-4x^4}{x^2(1-2x+2x^2)^2}
$$
and showing that the numerator is positive for $0<x<1$:
$$
1 - 4x + 8x^2 - 4x^4 > 1 - 4x + 8x^2 - 4x^3
= 1 - 4x(1-x)^2 > 1-4x(1-x) = (2x-1)^2.
$$
For (ii), we may assume that each of the factors is positive:
at most one of $xy/z$, $yz/x$, and $xz/y$ can be $\geq 1$
(if two of them are, then so is their product, which is
$x^2$, $y^2$, or $z^2$, contradicting $x,y,z \in (0,1)$);
and if exactly one factor is not positive, then
the right-hand side is $\leq 0$ and we're done.
Once all three factors are positive, we have
(because $\log(1-x)$ is concave downwards)
$$
\left( 1 - \frac{xy}{z} \right)
\left( 1 - \frac{yz}{x} \right)
\left( 1 - \frac{xz}{y} \right)
\leq (1-c)^3
$$
where $c$ is the average of $xy/z$, $yz/x$, and $xz/y$.
But $c \geq a$ with equality iff $x=y=z=a$: we have
$\frac12(\frac{xy}{z} + \frac{yz}{x}) \geq y$
by the inequality on arithmetic and geometric means, and likewise
$\frac12(\frac{yz}{x} + \frac{zx}{y}) \geq z$ and
$\frac12(\frac{zx}{y} + \frac{xy}{z}) \geq x$;
and summing these three inequalities yields
$$
\frac{xy}{z} + \frac{yz}{x} + \frac{xz}{y} \geq x + y + z = 3a
$$
as claimed. Hence $(1-c)^3 \leq (1-a)^3$ and we're done.
$$(1-x)^3 \le (\sqrt{2} - 1)^3$$ $$1-x \le \sqrt{2} -1$$ $$2-x \le \sqrt{2}$$ $$x \ge 2 - sqrt{2}$$
So this is only satisfied for $x \ge 0.59$, but x can be smaller than 0.59, so this won't work. One good appraoch is that maximum of the RHS is 3, so try somehow to prove that LHS is bigger than 3.
– Stefan4024 Sep 29 '13 at 18:32