What I usually tell people is that if it just a bow that doesn't have any particular meaning or attachement for you, then simply selling it and buying another in the desired weight is the way to go. Weight reduction requires refinishing, and by the time your done you have invested another $150 into the bow.
If the bow is in rough shape and needs a facelift anyway, then the weight reduction starts making more sense. And of course if the bow has a history with you, like it took your first deer, was received as a gift, etc, etc, then it really may have some personal attachment that makes a weight reduction a good investment.
As far as a bow actually performing better after a reduction, I have heard that a number of times. I think it can be attributed to the fact that when you shoot a lighter weight bow often times you can end up drawing the bow all the way back and use good form and back tension. With a bow that is too heavy, most people tend to "short draw" and that can cause all kinds of problems.
In other words, many people who are overbowed actually are pulling less weight than the bow is marked at. Say 60# @ 28", but if in reality the shot is going off when you reach 26" of draw you are really only shooting 54# anyway. Now when the weight is reduced to 54# @ 28" and you actually pull the bow all the way back to 28", I think it is very realistic that your shooting will improve. The bow isn't performing better at a lower weight, rather, the arrow is being loosed at a full 28", and the longer power stroke will increase performance.