WAIT! The whole point of the EGR is to DECREASE combustion temperature?

Okay, lets work through this.
To reduce emmisions, caused by high combustion temperatures they recirculate part of the exhaust gases back to the intake where:

1. It gums up the intake track reducing intake effiency
2. Dilutes the AFR so we need to use more fuel

So in order to appease the tree huggers (sorry if that offends but I have some pretty sharp views on that) and reduce whats coming out the tail pipe by way of increasing what we have to put in the tank? Someone please explain that logic to me.