But it causes less shares to go through. For example: I get 3,000+ kh/s, and when I monitor it at say 128 diff, I'm constantly sending accepted shares, when it's 512, I'll see it accept a share, but sometimes it takes too long that we already move on to the next block, so my hashing power during that time gets voided.
I hope I'm making sense.
edit: FWIW, I normally get over 3,000kh/s, but on this pool the most I've seen is 2,500 (i'm assuming this is because of the difficulty being at 512)
It increases your short-term variability: sometimes you have fewer shares submitted, sometimes more. However, it doesn't effect overall results. Over many days of mining it evens out.
If you keep mining you will see hashrates well above and well below your nominal value. There are no lost shares and no long-term opportunity cost associated with 512 difficulty. In fact, because it improves server reliability, the higher diff IMPROVES your average profitability.