Mike:
I worked at Calsonic, the current manufacturer of the C5 exhaust system (but not the Z06 system - that's another story!) for a number of years. I had a "responsible" position in Engineering; saying any more would identify me exactly. My work on what eventually became the C5 exhaust system began in 1990, and continued through the launch of the C5, during which time we ran countless noise, flow-rate, and backpressure tests on both C4 and C5 exhaust systems. It wasn't until just before C5 launch that we finally got our hands on an actual C5 mule to do development work; the bulk of our testing was done on C4's, including a number of LT5's. THOSE are wonderful engines!
Anyway, back to your question: I wouldn't hesitate to recommend putting a smaller diameter system (say 2.25") on any Corvette making less than say 450 HP - we developed just such a system for one of the test cars from GM that had a 450 HP Lingenfelter LT5 (there's a car that I'll bet never saw GM's resale lot!) The issue, as I mentioned before, is the size of the muffler and resonator inlet bushings. Since these fittings are so small (about 2.125"), there is an abrupt transition from the larger (2.75" ?) system pipe size down to the muffler inlet, and the pipe has to be necked down to fit inside the muffler bushing, making it smaller still. This sharp transition produces far more flow resistance than does simple frictional resistance in the pipes. And, the disturbance in flow that results when the pipe necks up at for example the resonator outlet (on a ZR-1) produces a similarly sharp increase in flow resistance. Using stock mufflers, you get a smoother transition in and out of each system element, and an overall lower backpressure. A fringe benefit of smaller-diameter pipes is reduced noise and improved sound quality. If you really want to kill the low-frequency 'boom' in a C4, put in an exhaust crossover pipe just before the rear mufflers like the Walker "Rear 'Y'-pipes". We at Calsonic first proved the effectiveness of this crossover. It may be purely coincidence, but one of our engineers went to work at Walker shortly before these "Rear 'Y'-pipes" came on the market.
Backpressure is the enemy here, of course, and its' effect on HP. According to Zoltan Varga, the GM exhaust engineer at the time, the L98 engine could make about another 20 - 25 HP with a reduction in backpressure to the level of the C5 system.
One final note: Having developed the C5 system, and knowing what its' backpressure is, I can tell you that Borla et al are bullsh*tting you when they promise increased HP. Too much of the C5's system backpressure comes from the catalysts for any significant reduction to be possible with muffler changes alone.