I think 120psi on a 700x25 is way too high for a 160 lb rider, unless the bike itself weighs 100 lbs. 85 - 90 psi is more like it for a 160 lb rider on a 25 lb bike.

In general, never use the advertised max pressure the tire is rated for to set your psi. Setting the psi is all about the rider+bike weight and the tire deformation while sitting on the bike. And deformation is your frictional friend by providing a larger contact patch, especially around hard and fast turns, though too much deformation can be your snake-bite nemesis. There's lots of charts out there to help you determine proper psi.

As for the tire, retire it (pun intended).