The Kashmir region of India's border with Pakistan is already tense enough as it is. The Wagah ceremony, with its pomp and military precision, doesn't need to be a spectacle that draws tourists to the region every night. Instead, why not have the two sides work together to mutually close the border? Instead of briskly lowering flags, why not have both sides intermingle over coffee?
There's little, if anything, that indicates the ceremony has led to any increase in hostility or disdain between the countries, and it's been done down to a science so well at this point that many travel to see it as a performance of art. There's no immediately obvious benefits for dumbing it down.
I must admit that the Wagah border ceremony is one of the more bizarre manifestations of bureaucracy I've ever witnessed. However, one thing I noticed from watching videos of it on YouTube is that it's so popular, there are bleachers for an audience to watch it. That means there is likely a local tourism trade that depends on this strange ritual, and in an economically depressed area, that makes it something that they cannot afford to alter. I guess that's how traditions get started.
No, Indian and Pakistani forces should not tone down the nightly Wagah border ceremony, because it is what has kept the peace between the two countries for this time. The ceremony is just that. It is a ceremony. It is not a military action. If military pagentry is what keeps peace in the region, it is worthwhile.
It's a spectacle that promotes tourism, gains interest from locals, and doesn't seem to harm anything. So, what purpose is there in it being minimalized? In an odd way it's a cooperative effort between the two countries, which really given how unstable the region is these days isn't something we should ever be discouraging. I see no harm.