We had an obituary for Fred Brooks on here just the other day. I'd suggest that his thesis in The Mythical Man-Month conflicts with your comment above (that reduction in staff count for a software project has a good correlation with the ability to maintain it / evolve it / innovate on top of it).
I've never heard of (or thought of) your interpretation of the corollary to Brooke's Law, but removing people from projects until they succeed and are on time seems like a bold strategy.
Happens regularly in the Free Software & Open Source world, where software projects are often forked by a single individual. Obviously enterprise software is on another level, but the principle remains that reduction to a smaller development team (for some period of time) does not necessarily correlate to a threat to viability and has often indeed been a reinjection of vitality.
