Generally speaking it does knock down collector value if you do a restore job. How important that is to you compared to wanting the gun to look nice again, only you have the answer.
Before all the other brands of 1911 handguns came along, the Colts be they civilian sale or military "surplus" were modified by competitors for Bullseye, NRA Action Pistol, IPSC, etc. Nobody I ever talked to had any regrets about messing up the resale value.
Nowadays with all the clones available, some already set up as race guns, it would be a shame to chop, grind, drill, etc. on a 1919 commercial Colt. But every once in a while on a gunsmithing forum I visit, someone shows pictures of their project gun recently made from one of the old timers.
"I have decided not to vote, speak in public, assemble in groups or petition my government either directly or by writing to the newspapers.
Some ignorant person may become alarmed, and we can't have that.''