Why not conduct a smaller denomination from maybe 1:100 instead of 1:1000 and burn the rest of the outstanding tokens in proportion?

This way you reduce the amount of tokens all the same but you still have the vote of confidence from early investors.

I understand that the value is currently the same but ultimately the yield is not going to be the same if the pricing of the new token doesn't increase in scale, or am I missing something?

I understand that this is a complex process and there's probably (hopefully) good reasoning for the decisions being made, but I hope you understand my concern.