Erm, lets try an easier way to explain it.
There are a couple factors at play here. You know that the lower gears are shorter. Well, shorter gears actually put more power to the wheels because of the way that torque works, getting multiplied in power in lower gears. Look at it this way: you know how much easier it is to spin your wheels in lower gears. You are applying more power, even though your engine isn't producing more.
Then, think about shift points. If you shift AT max power, you were at max power for a very short time, then you drop revs lower down in the next gear, dropping off the powerband. Were you to shift AFTER max power, you not only were at or near max power for longer, but you also shifted up into a higher RPM than if you had shifted up earlier, putting you into more power quicker. This is especially evident in turbo engines such as yours, where shifting up too early can drop your engine off of the boost, giving you massive turbo lag every time you shift.
Also, there is ease of use. It takes a pro to shift at optimal RPM, first time every time. If you make your RPM limit later, you are making your optimal RPMs for shifting later and longer, easier to shift at.
There are lots of benefits. In the beta which I am testing, there is a stat called "Performance Index" which will eventually be added in game. This tells you, properly, how well your engine actually performs, and gets a higher number (to a point) when you raise the RPM limit. As a general idea, raise your rpm limit until you reach 80 to 90 percent the max power.
(I'm gonna steal this from daffy

)
Here is a pic of an example of what I am talking about with gearing. You see how even after max power, the car is accelerating faster than it would be in the next gear? Ideally, you would be shifting up right when the previous gear's graph touched the next gear's one.