It's apparent to me that there is a lot of confusion on this topic because people have a lot of preconceived notions that just aren't true. For example, OP, sizing down does not mean going to a 55.5 ETT. That's totally random, because a smaller, more compact frame could offer the same ETT, it just depends on the design. Same for the smaller headtube comment; depends on design.

The main reason to go to a smaller frame, from my perspective, is to get the perfect fit. The secondary reason would be to tighten up the handling on a frame design that would otherwise be too flexible, specifically "standard" (i.e. smaller or traditional) diameter steel and titanium. The tertiary reason would be to perfect front/rear balance via a shorter wheelbase, if in fact more reactive handling is desired.

But again, it all depends on frame design. I don't think I'd take a hit on ETT, though, just to run a longer stem. There would have to be compelling features in a frame in order for me to consider that. Rather I prefer to work around ETT, starting there, and finding the most compact frame with the right numbers. I understand you're approach may be different, however, but I'm just uncomfortable justifying the choices proceeding from compromised fit.