Cheap Performance Mod... Or is it?

[Daniel R]

As nothing more than a thought experiment, I was wondering what would happen if one was to reduce the total wheel/tyre diameter, ie. replacing rear 265/35 tyres with 265/30 or even losing an inch in wheel size and not compensating with a higher profile tyre?

This would reduce the angular inertia of the wheels considerably as mass is being removed from the outermost part of the wheel.

It would also have the same effect as running a shorter rear diff... no need to explain this benefit to your average "Larry Leadfoot".

It would also allow for more clearance in the wheel well so more caster could be run (better suspension setup?? and increase in wheelbase), as well as lowering the centre of gravity a little.

Now the question is, what am I missing here? I really would like to be strongly critiqued on this one, as it seems that there is a lot to be gained with very little lost.

And yes, I realise that the speedometer will be off and potential ABS problems etc... Not really interested in hearing these tired old answers, want to know about negative effects in handling or other performance issues and why they will come about.

Thanks in advance.