So, if it is true that when people regularly change their passwords, they pick poorer passwords, then perhaps those poor passwords are a larger risk than the risk of maintaining a compromised password. Again, this is not a question of what is the most rational policy. It is a question of human behavior, which means in order to find an answer, we need to study what people actually do.
I googled to see if I could find studies on this, and I did: "The True Cost of Unusable Password Policies: Password Use in the Wild" by Philip Inglesant & M. Angela Sasse: http://www.cl.cam.ac.uk/~rja14/shb10/angela2.pdf I have yet to read it in full, but they do touch on this idea at least some.