its all about exhust velocity. You want the least amount of back pressure, but you want the exhuast to flow quickly. Having a smaller diameter exhaust will create more velocity than a larger exhuast, which is why you can loose power when you get too large of an exhuast, of course if you get too small of one you have back pressure which is bad. The key is to find something in the middle that is small enough to have good flow, but not so small that you choke your engine.