flat bars are easy to steer and provide good leverage. both of these things are lost when you cut them down to nubs though.

while i don't have the exact answer to your question, i will say that many types of bicycles use a palm-down stance. every mountain bike (except the few who prefer dirt drops, which is probably less than 1%), bmx, trials, many recumbents, most "hybrids" and many "commuters" it's not just fixed gear kids on the street... there is definitely an advantage to be had somewhere.