We cruised at 1,800 and could do almost 7 in a 3ft seaway. The engine we had aboard Tropical Dance was a 6-354 Perkins that maxed out at 2600 with 130HP. Of course, we were 50' on deck and 40,000 Lbs empty. Cruising weight with full tanks was probably closer to 50,000. Everything about the slow RPM's was great. If we had a smaller engine we'd be forced to run at 22 or 23 using more fuel and making more noise along with the fact that the engine would wear out faster.

Everyone cruises differently. I don't think you can go wrong with an oversized engine running at 1/2 or 2/3 rpm most of the time. The money spent to purchase a bigger engine is worth every penny, the engine won't be stressed, it will be quieter, use less fuel and last longer.

I can see Steve pushing his 25,000 lb boat into 6' seas for 48 hours pushing a smaller engine to the max that will sooner or later complain big time. As long as it fits I don't think over horse-powering would be a waste of money by any means.