I mean this is pretty common practice for most ICO's now, it instils confidence from the community knowing that the team won't be dumping them, but yeah, less tokens in supply usually can have a positive impact on price.
You're right, even though is not always the norm but its of essence that tokens be kept at a minimum supply, aside from the fact that it instills confidence like you stated but it also relates to the principles of a means of exchange, which states that such should be scarce, as that's one of the good qualities of a means of exchange