Anytime you add another cooler into the cooling system, it will drop the temps. However, the trans temps should not increase that much unless you are doing a lot of mountainous driving, or pulling a trailer. I have an I5, and my trans temps never raised that high when off-roading or normal flat level driving. However, in the mountains the temps did go up, but nothing to really get excited about. However, when I started to pull a trailer, I decided to jump into an external cooler. It is an external stacked plate BM, 44K cooler and it does the job.
It is in series wit the standard radiator cooler.
There is NO warranty data that shows the H3's internal radiator cooler fails in any greater numbers than any other internal radiator cooler out there. Internet data is always suspect since most will report a problem on various sites, thus increasing the the belief there is a problem. (Radiator does have a top tank problem.) Then you have a few report it on a particular site, but run those numbers not against those on the site, but run the number against ALL H3s produced and suddenly that number of radiator failures drops to norms for all other vehicles.
However, nothing wrong in bypassing, just make sure the trans temp can rise to at least 150 degrees. It is more efficient at that temp.
When the H3 Alpha was replaced, it was pretty unanimous in engineering that the radiator specs appeared to be too small for the engine. I left GM before any data was fed back into the system, and I never had anyone look it up out of curiosity (since I don't have an Alpha...didn't care).