The cat causes backpressure and just the piping itself. Mostly the pipng closest to the engine. As you get further from the engine the effect is lessened. The air cools and contracts and therefore moves more freely as it gets further from the engine. That is why a properly tuned header will give you far greater gains that a tuned exhaust because the effect is more noticeable right near the engine. The cat is also one of the greatest sources of backpressure, but it's required by law. A high performance cat will be larger and less restrictive allowing for a more free-flowing exhaust. As I said previously, less backpressure is good to a point. This is noticeable if you've ever run an engine without an exhaust, or possibly even without headers. My high school's auto shop built a drag car and we ran it with only the shorty headers and it backfired and shot flames all over the place. It was cool, but it ran much better once we put some pipes on it (only 3 feet or so, mostly to keep the flames from shooting onto the fiberglass hood lol).

 

So, what your saying is, replacing all the piping back to some performance headers with something say 2.5" could cause a loss of backpressure enough to reduce power (assuming there is a high flow Cat and Muff in the system).

 

Yes going too large will eventually cause a loss of power. I myself don't know what the magical diameter is for exhaust performance, but it's a pretty safe bet that if a company with a good reputation offers a performance exhaust for your car, they've done their homework and it will give you power gains.