Drag racers run lower pressure because of the larger contact patch but autocrossers and circuit racers pump em up to reduce sidewall roll (when the tires tuck under a bit during cornering, as below) and improve handling.
Since most rolling resistance is because of sidewall flex (in a straight line or not), inflating to a higher pressure will help you roll better.
If you overinflate the tires, yes, the tread will bulge in the middle. The opposite is true if you underinflate them. However at max sidewall pressure or a few psi off you'll do no damage. I'm going to go out on a limb and say you'd have to be pretty far off the recommended numbers and/or do it for a long period to get abnormal wear on your tires.