Your right about the rotational mass of the tires also effecting the power loss, especially w/the 22r(e) motors, however that can be helped some /aluminum wheels instead of steel, and some engine mod's.
I'd take 215's and 4.10's over 35's and 5.29's any-day for driving on the road. My toyota is SLOW!
I understand completely. I have 5.29's and 35's w/my '91, and it isn't all that enjoyable to drive performance wise, but then again it is basically a single purpose rig, and I am never in that much of hurry when heading wheeling. If I had to drive it daily, I think I would run 33's for street use. I know a lot of people prefer to run one gear taller than the tire size w/the 22r(e), for better highway performance.