With client-side decorations, the client sends exactly one buffer to the server - the complete window - every time it resizes.
With server-side decorations, every time the window's resized, the server has to create and fill a new buffer with the frame, then do a stretch blit (or fill the undefined contents with a solid colour, or whatever) of the contents into the frame window. Asynchronously, the contents are updated and the updated contents are blitted back into the frame. Aside from the waste of resources from the additional buffer, I believe it looks measurably worse. The 'spasm' as you get the frame changing size, followed by the content being stretched, followed by resized content (quite possibly from an old resize event, so just beign differently stretched) is pretty horrific.
Additionally, if your problem is resource starvation such that the client can't keep up, adding additional load in the form of the server drawing decorations for sizes the client's never likely to make, and the extra resource load from the additional blits, exacerbates the problem.
I'd much rather just have the pointer lagging a little behind.