I really don't think it's a good idea to put a 10"+ tire on a 7" wheel. If it works for you though, go for it.
Mulch: Do you have any wearing issues? Do the wheels pull the outter edges of the tires up a little bit and cause un-even tire wear? I've read that's what happens. I've heard 275 nittos are comparable in size to 255 BFG's, so it might not be a problem for you if your current setup is doing well.
With the 255/60's, that might not be as much of a problem, but certainly it would be with a 265/50 since there's less sidewall to stretch.