Does size matter?
 

Does the diameter of your exhaust pipe affect low-end torque? Ever since I installed a custom exhaust with 3in pipe, I noticed starting from a dead stop is sluggish. I currently have APR chip.

Of course it matters. There is a sweet spot between free flow and gas velocity that is desired.
 

Going bigger = slower velocity unless you have the ump behind it (bigger engine typically). Going smaller = increased resistance. Many run 2.5" pipe on 1.8T without issue. The 3" adds a fair amount to the displaced volume of gas that must be moved but it seems doubtful it would drop performance dramatically in and of itself. My $0.02 worth.

To gain full benefit 3 inch pipe should have a larger turbo.

Yup...Bigger isn't better...>
 

I was just reading in Bell's "Maximum Boost" last night about that. 250 Ft/sec is what you want to maintain velocity. A Max of 300hp requires less than a 2.5" exhaust.

is that a 3" DP as well? catback shouldn't matter as much as DP or midpipe (cat) does.
 

2.5" (optimum) to 2.75" max for K04s. otherwise, overspooling our K04s with 3" DP.