If you are 'stupid' (not necessarily intellectually, but in some ways), the neurosis (psychosis is a strong word, no?) is less, you don't think about things you shouldn't (bothersome, existentially) and you have a healthy and comfortable intellectual-emotional life.
If you are very smart/smart, you can get beyond the temporary plateau of 'thoughtfulness' that also brings neurosis. You think about things that are bothersome, but you have enough mental strength to overcome and suppress them. You're high-functioning intellectually, and it doesn't take a toll on your psychosis.
If you're in the 'middle', you tend to think about things, and keep thinking till you've found reasonable solution. It is bothersome, depressing, and often not pleasant. But you have the gift of 'thinking', and you like using it. It's a stimulating albeit mentally tiring existence.
When you say you're 'dumber', I interpret it as you saying you've trained yourself not to ponder upon things that will lead to no obvious outlet. Maybe you've genuinely trained yourself to never think about certain things, maybe you've trained to control your bothersome thoughts on command. Either way, you've trained your thoughts to a 'different level'.
/armchairAnalysis
I can, happily, quash general anxious negative outcome thoughts (i.e. fixation on a specific negative thought) - but just having to go through them all, even once, as part of the human path-finding algorithm still takes its toll.
Ultimately the benefit, in terms of having Seldon-esque pre-sight on many matters (although I don't hesitate to admit that I do get things wrong, as the imp of the perverse likes to roll the dice from time to time), outweighs the toll - although I do, from time to time, worry that I will end up in a straightjacket.
Aerobic fitness has been shown to have significant correlation to executive function in the brain, which affects decision-making, mood, and the speed of information processing.
Weight training has not yet been shown to have significant cognitive effects, either positive or negative.
As a lifelong swimmer, I can also say from personal experience that my focus and motivation seriously benefit from maintaining a routine exercise program.
Your perceived lapses in cognitive function are are probably more behavioral; instead of standing around thinking and smoking, now you are spending that time engaged in both mind and body.
I couldn't generate streams of vivid ideas anymore, but I'm much less fuzzy and kind-of "psychotic" I'd say.
I was great with words (In russian which is my native language) - I couldn't write so cool and fast anymore. I guess I'm less funny now.
But I'm more steady and confident. I'm dumber, but I'm much more happier.