I presume you COULD reduce the size of the outwales if you have inwales, but other than saving a pound or two, I'm not sure why you might want to do so.  

I suppose the narrower outwales with inwales would be strong enough, but why not go EXTRA strong by leaving the full width outwales plus inwales?

The outwale serves as a good splash rail - helping to turn the water coming up the side of the hull outward (especially when heeled over/moving fast/in larger waves).  In these conditions I still occassionally take some water on board, the first "breach" over the side seems to usually take place a foot or two behind the mast partner.  I believe this might be the most important of all 4 reasons I give for keeping full width.

Also, I'm not sure your plans for oarlocks.  If in blocks set on top of the inwale/outwale, you'll need to make sure you've figured out how they'll be positioned with a narrower outwale and be happy what what you figure out.  During my build, I happened to be reading about a NE Dory that was on one of the Everglades expeditions or maybe the Texas 200.  Anyway, shown was a picture of a blown-out oarlock (splintered wood outwale).  The Dory had standard outwales only, "regular" 90 degree angle locks with no blocks on top of the rail.  Because of that blow out picture, I added extra pieces of the 1x1 outwale wood about 4 inches long (nicely contoured and rounded edges) underneath the outwale at the oarlock positions.  I'm very glad I did.  It adds a lot of strength and let me use bigger screws for the oarlocks. (Now a side note on oarlocks - the NE Dory hull is angled outward steeply enough (especially at the center seat rowing postion) that on the recovery portion of the stroke (with full ring locks) I can raise the oars only just barely as much as I'd like to prevent catching wave tops, especially in larger waves.  If I had it to do over, I might us the "on top" wooden block for oarlock mounts, and square them up to horizontal or near horizontal - enough so that the oar can dig deep in the water, but still clear the wave tops during recovery - but moving back to topic)...

And finally, the outwales provide a lot of hull protection as a rub rail when up against docks. Narrower might only give a better chance of scratching the hull v. scratching the outwale (rub rail).  Fixing up outwale dings is relatively simple, and after a while they all look like they belong there - and that's even without adding a rope or rubber rub rail.

So, I can think of 4 reasons to keep the wider outwales (hull strength, spray rail, oarlock strength, rub rail) and only a couple of pounds weight as the reason to reduce the width.  I don't think there will really be any difference in aesthetics, if that matters, but that is in the eye of the beholder.

   I took the NE Dory class in Annapolis.  All but one of the builders specified spacered inwales.  So five of us used 1" x 1/2" stock for our rails, two pcs, and the boat without inwales used 1" x either 3/4 or 1, two pcs, for his rails.  
 

So it seems that's what CLC recommended.  
 

I think it would be fine either way.  It looks fine with the narrower rail...

There's lots of pictures on our Facebook page here:

https://m.facebook.com/groups/279233566807097/?ref=group_browse

I just finished the inwales, so lots of closeups of them.

Mike