think of it like a cautrising a wound. if you really damaged it nothign is going to fix the burnt out portions. but this will help prevent further damage. if it isn't actually damaged and the performance drop was simply from droppign clocks back to stock settings on the other hand this will help dissipate heat generated and help prevent it from beign damaged.
i make it a rule of thumb to re paste any card i am doing on a build cause even some of the best thermal paste is still cheap and will be more than worth it over the whole life of the system in the long run
adding a note*
if you're serious about overclocking a card they do make aftermarket gpu coolers which usually do a pretty good job frozencpu.com has some as do most computer parts retailors