The issue is that narrow tires have a very, very inefficient suspension behavior, and road surface and rider movement causes it to be constantly exercised. That does not mean that you gain anything from going nuts - there are diminishing returns just like there is for slimming the tire for aerodynamics.

What tire is best depends on the surface, the rider and the speed. On a perfectly paved road at high speed and with a light, stable rider, 25 might be right. On regular roads, 35 might be faster. On a bumpy mess, "smooth fat bike" tires would indeed be faster still - assuming you can stay upright without the tread. There's a reason you don't take a road bike with 25mm tires to do downhill mountain racing.