With a relatively small group, I don't like this idea. The handicap formula is already a bit slanted in the better player's favor (ESC and .96 Reward for Excellence factor or whatever they call it). Plus a very good player sometimes loses -0- strokes (80% of 2 is 1.6 and if the handicap is rounded, the result is 2). If the handicaps are legit then play with the full handicap the first day and agree to adjust the handicap allotment each day based on prior play.
If you are playing 2-man teams or something like that, then I think the USGA has some guidelines on using only a percentage of the team's handicaps.
You are right, you don't want to show up with the highest handicap and run the table. Better to aim for breakeven and take fewer strokes if you start off winning.