I agree that bouncing off the rev limiter is rarely a good idea, but if those extra 700rpm means that you're higher up the power band after the shift, then you will have more power available overall.
Let me try and explain this better. Imagine a car with the following power;
50bhp at 1000rpm.
60bhp at 2000rpm.
70bhp at 3000rpm.
80bhp at 4000rpm. (Peak power)
70bhp at 5000rpm.
And a gear shift loses 2000 rpm. So shifting at peak power (80bhp) drops you down to 60bhp. If you shift at 5000rpm, you don't drop down so much in power (you drop to 70bhp rather than 60).
It's a rough example, and it would depend on what your car does after peak power. But most cars at least hold on to a decent percentage for a short time after peak.
Edit: I should also mention that it's probably the torque curve rather than the BHP curve that should be used in this way, but it's easier to explain power.