The way I was taught to brew with extract was to use half the total volume and top it off with bottled water. This saves boiling time and cools the wort pretty quickly too, but it seems to me you could use even less water and just top off with more water. It seems to me that you could use 2 gallons of water instead of 2.5 gallons. You'd just have more concentrated wort until you topped off your fermenter. Is that right or is there a critical mass of water you want to work with in your wort?