I would think if the suspension was still pushing the tires down the front end would just keep raising on up with the down force on the hitch.
You are correct, any lift on the front end (especially with the unloading from the weight on hitch and torque from rear axle hooking), will raise the front end, but 200lbs of lift on a 4000lb front end won't due much (fraction of a fraction of an inch).
My physics is a little rusty but if my thinking is correct, the torsion bars excert a force trying to lift the front end of the truck. At a specific torsion bar setting, as the front is lifted “externally” the force exerted by the bars lessens (they unspring).
When stationary and unhooked from the sled, the majority of the weight is on the front wheels. In order to keep the suspension from riding on the stops, the torsion bars provide a force to keep the front end up. If the total unsprung weight supported by the front wheels is 4000lbs, the torsion bars are exterting 4000lbs of upward force at ride height. When no force is exerted downward on the front suspension (due to straps or blocks) is when you end up completely unloading the front suspension and bad things happen while pulling (as many have found out the hard way).
Yes with the torsion bar bolts backed out (and even removed) there is still force being applied (just nowhere near the 4000+lbs) it takes to lift the front end to ride height. With the suspension lifted (from hooking), there still is most likely a couple hundred pounds still exerted on the front tires. It's not enough to lift the front end (much more than the sled already has), but it’s enough to help keep the tires planted.
If you’ve ever removed torsion bar keys, even with the bolts backed all the way out, there is still some preload on them from the bars (which is why you need the torsion bar unloading tool to load the bars and remove the adjuster nut) and that's even with the suspension topped out. As long as the suspension does not top out when the front end lifts, the torsion bars exert a downward force (even with bolts completely removed). Most likely applying a couple of hundred pounds vs. 4000+ needed for stationary ride height.
Again, it would be interesting to see what happens with the torsion bars removed (ie. no external force other than gravity being applied), but I don’t THINK it will work well. A tuned coilover would be ideal, but again, cost vs. benefit.
Again this is not a tested theory, so if you want to test it, that would be cool to see what happens in the "Real World". What often looks good/bad on paper may not be in practice. If you do, please let us know how it goes.