This is a possible subject of debate. In Jim Hand's book on Pontiac Engines he says "I suggest you use the t-stat with the temp rating that you want the engine to run at....I find that my engines run best with 160 degree tstats when the outside temp is 60 degrees or higher and the oil temp is up to normal. Higher coolant temps tend to make the underhood area hotter, heating the intake and carb, adn reducing the quality of air coming into the engine. This causes performance to drop. While dyno tests may show slight gains in hotter vs cooler engines, there is no engine compartment heating in the inlet air for dyno testing!"

I'm quoting his words, not mine. But based on that quote, I'd be very willing to try the 165 and see how it works. Especially if someone like Jim Hand says it might work better than a hotter stat...

All that said, I don't know how much daily driving Jim Hand does with his cars. His recommendations may indeed come from drag racing alone...and may not carry over to the street ideally. So I'm not entirely sure in what context he writes this.

If the 165 results in a runaway cooling system because it never has a chance to close, then you will lose cooling efficiency, and I agree entirely this could be a problem. But since you already have one laying around, it's certainly worth trying IMO.