The gear ratio multiplies torque, just as the transmission does.
What gear ratio is really only a spec, and should be selected with the transmission gearing, tire size, engine powerband, as well as usage to select properly.
I hate when people say that at a certian power level, as steep gear is too much. That all depends on the vehicle usage. I saw somewhere a equasion where you could figure weather you need more or less gear based on the MPH and ET. I also saw a calculator on a website with something similar. Generally speaking, you want to cross the finish line just past peak HP.