The power source has been the big limiting factor in electric propulsion. If your exhaust velocity is several times the mission delta vee, your propellant amount becomes really small. But your power source is probably going to be big. If you use a lower exhaust velocity, you need more reaction mass, yes, but you need less power also. This might in aggregate be better!

Ie, higher exhaust velocity can result in worse performance.

It all depends on your power source, mission delta vee and required acceleration.