Smaller tires causing steering wheel shakes Options

[rocketcost]

Hey guys,

So I bought some low pros and alloys to put on my car, and at high speeds the steering wheel will shake. It comes and goes as I drive straight down the freeway. The difference in diameter from the OEM ones are about 1 inch smaller now. I have had the tires/rims balanced twice, the second time they said that both fronts were out about a half a gram. The problem still happens, so I called them again today, and the guy said that due to the difference in circumference, "the drive line is working harder" therefore causing the steering shake. To give you some numbers:
OEM (equivalent) according to google: 185/70 14
Current: 205/40 17

Difference between the two:
1.3 inches in dia.
2.3 inches in circumference
27 extra revs per mile

Is this pure bologna or are they telling me the truth (and I just don't want to admit these tires won't work)

Thanks!!