i dont think you will lose power just it gets to a point where you wont gain anymore by increasing size.

 

Well having a 3 inch exhaust on lets say a stock k03 wouldn't decrease the horsepower per say, but the lack of backpressure would decrease the amount of torque the engine would produce, which would reduce 0-60 times.
I personally wouldn't put a 3 inch on mine un-less im running a 2871r or bigger.