I had a reply to this thread typed up last night, but managed to crash my computer before I could post it.
Anyway, I routinely install smaller distribution piping on the hot side than on the cold side. Not so much because of the little bit of money that it saves my company, but because of the money and inconvenience it saves the end user. A larger pipe takes longer to flush all of the cold water out of it before hot water gets to the point of use, and also takes more hot water to fill it up, which then cools off. This ends up costing the homeowner more in both water bills and energy costs to heat the water.
So, does the lower flow affect the use of the fixtures in a significant way? IE, really weak hot showers, dishwasher taking forever to fill?