From my reading I would think the .327 to be a reasonable choice for a smaller self-defense firearm. The casing is longer & thicker than the 32H&R to handle pressures that double the H&R.
Some of my reading compares the performance of the .327 to similarly weighted 9mm cartridges. The following velocity and energy information is from Speer Ammo - Home
, and gives a metric to compare the different rounds. All are for Speer Gold Dot Hollowpoint ammunition tested in 4 inch barrels (they didn't have a chart for .327 in 2-inch).
115 grain 9mm: Muzzle velocity 1210 fps. Muzzle Energy 374 ft/lbs.
115 grain .327 Federal Magnum: Muzzle velocity 1380 fps. Muzzle energy 486 ft/lbs.
125 grain .38 Special +P: Muzzle velocity 945 fps. Muzzle energy 248 ft/lbs.
125 grain .357 Magnum: Muzzle velocity 1450 fps. Muzzle energy 584 ft/lbs.
In 4-inch barrels, I think it is clear that .357 Magnum is the winner, and looking at ammunition performance alone, it would be my choice. But when you consider the firearm, for me the .327 seems to have a slight edge for small-frame detective revolvers. You get a 20% increase in ammunition over 38/357 (from 5 to 6), while maintaining respectible ballsitics and reducing recoil.
Since the .357 Magnum's performance is degraded a bit out of a 2-inch barrel, I would be curious to see what the ballistics look like for the .327 out of a 2-inch. IMHO, based only on incomplete armchair research, I think the .327 would be a reasonable replacement for .38 Special in a snubnose.
If you are hoss enough to carry full-house .357 Magnums in a pocket gun, then you may have some questions you need to ask yourself.