Starting in the late 1960s, higher-temperature thermostats—185°, 190°, 195°, and even 200°—were installed at the factory to help clean up emissions. Hotter coolant means more complete combustion because of less quench-out, so there would be fewer unburned hydrocarbons (HC) and carbon monoxide (CO) in the exhaust. But higher combustion chamber temperatures also mean more oxides of nitrogen (NOx) in the exhaust, so starting in 1971 the factory began backing down on thermostat temp—from 190° to 185°, for example; specifics depended on engine and configuration. But then in 1973, valve-regulated exhaust gas recirculation came along as an effective NOx control strategy, so thermostat temps started climbing again; the spec was 195° pretty much across the board by 1974.
Generally, and within reason, hotter coolant is better. A hotter engine is more efficient, and there’s less engine wear and longer engine life, because there’s less unburned fuel to wash the oil down off the cylinder walls. The exhaust contains less toxic unburned fuel and carbon monoxide.
The thermostat controls the minimum temperature of the engine. It cannot control the maximum temperature.