Shrinking Skins reduce their size?

I heard sometime when DoCa-CoLa said that you could reduce your map size if you have many skins and want to reduce the map size, he said you should export the skins, convert it to .tga and then shrink ir from 512*512 to 256*256 and then convert back to .blp. I know this reduces the skins size but does this not damage the skin? or give it a bad quality?

bad quality, but at the end who cares?

what I noted is that with things like icons another size might not work