Lowered Suspension a bad thing?

Well, the simple fact that you've had 1" of travel removed from a bike brings limitations.

Now, those limitations can be outweighed by the benefits a lower bike can bring to someone / You.

You get into different parts of a leverage curve with a linkage, or damping curves with relation to a position sensitive fork damper, people will mention, too. But, you've ridden with those differences for a while now, I suspect. 

You make your choice on set up, as you already have done. You might want to try something new to you, / your bike.

You make your choices. 

Me, I can barely get onto a bike, without getting up onto something, or having the bike in a hole. I've been that way for a few decades now. Same thing with actually being able to stand on the pegs - I can't, well, other than, for many years, when doing so, having ALL of my weight on the one leg (with all the weighting problems that brings) . To add to my many weird set up(s) , I have a High seat  ( as in Jack Van Velthoven HIGH - older blokes here will know who I refer to) because my knees don't bend very far. But, I've  always wanted All of the travel the bike has, to deal with riding through whatever is on the ground, while sitting, damned near All the time. 

I've finally got to the point that I might refit the 7mm internal spacer my Ohlins TTX shock came with, to lower the rear end by around 22mm, then slide the forks up, to lower the bike. But, then I'll be hitting my feet on even more things, what with the 32mm lower pegs  I Have to use. 

Choices, as I said.

Do what You need / want.

Hopefully, It's an easy change back to full travel ,if you want to try that again. Most reductions are easily reversed, though, some, not so. 

I lowered my 05 KX250, was much faster and more confident on it.  Just running the PC link ruined the geometry so I put limiters un the forks too.  IIRC front and rear was 18mm. When you lower, you need to convert everything to percentages like sag, etc. 

Ive lowered a bunch of bikes. When you go more than an inch/25mm you get into assembly issues/spring preload interference, and have to modify the fork springs.  Shocks you can work around by precompressing the spring.  My current KX (supermoto) is lowered 37mm.

The KTM Group lowered the Husqvarna! Maybe that's why there are only a few pro riders left.

Yes, I know the FE bikes are the same height as a KTM and yes I know Factory bikes aren't production and this post is sarcasm.

My wife's yz125 has been lowered around 50mm. I've cased a big double on it with no issues. That bike rails corners like nothing else. Only real issue i can see is that you lose some travel so you end up in the stiffer part of the stroke quicker. 

My wife is around 60kg's and novice rider, I'm 85kgs and race vet expert. I can crank the compression in front and rear on her bike and hammer a track. I don't see the issue with a lowered bike, especially if it is set up for you