I had this argument the other day with a rather clueless parts guy.
205 deg is a bit high to START opening, but it's more or less normal for it to be completely open. I'd replace it, but it's not causing overheating (yet). Stock for most (all?) RBVs is 195 deg.
People think cooler coolant makes more power. No, it doesn't. Cooler AIR CHARGE makes a little more power, but unless you have nitrous on your intake (which is illegal on the road and will give you cryogenic intake temperatures), the difference is VERY SMALL. Why? At high airflow (WOT, high RPM), the intake charge is within a few degrees of ambient regardless of any manifold heating or whatever. At low RPM, it matters much more, but you aren't really measuring power off idle, are you? The air just doesn't spend enough time at high flow -- in a properly sized intake on a tuned engine, it's transonic -- in the manifolds to change temperature much.
People also seem to think a lower thermostat does something about overheating. EVERY working thermostat will be wide open well before overheating takes place.
I replaced the thermostat on the Chevy on Sunday. The parts guy INSISTED on giving me a 160 deg thermostat. It's carbureted, so the computer won't be confused into continously warming up. BUT it has enough of a fuel atomization/evaporation problem with wildly different intake runner lengths (3/4 is extremely short; the rest are substantially longer) even with a properly working heat riser, at idle and low RPM, that it makes no sense at all to try to cool it down.
I insisted on a 195 deg. It works. No way this thing is overheating; it has a massive 4row radiator (intended for V8s with air conditioning and the tow package).