Watching films from the 1950’s-1960’s, as compared to today, it appears as though swings have changed in one regard. Today, it’s very common for a hitter to release his upper hand as he follows through with his swing. Back in the day, it appears to me it was very rare. Am I dreaming?
I play a lot of softball and a lot of home run hitters do the same. Personally, I think they’d still be HR hitters if they didn’t release their grip.
I first started noticing this when Walt Hriniak was the White Sox hitting coach in the late '80s and early '90s. He’d coached for the Red Sox for several years before that, and I think he’s had some lasting influence on the game.
I think you’re right, as the ball has already left the bat by the time the hand is released. I don’t know for sure (and I’m sure somebody will be along to correct me if I’m wrong), but I’d guess that this technique helps hitters stay in the habit of always completing their follow-through, which among other things makes for a more consistent swing.
It is obvious. Also, it happens after contact, so not sure about the effects.
When you watch older games, even the movements of the pitchers have changed. Little things look different.
In the 55+ softball world one frequently hears that releasing the upper hand in combination with dropping the little finger of the lower hand beneath the knob adds bat speed. I tried dropping my pinkie for a while, but all it did was reduce my bat control.
For a right hander there may be an advantage in stopping the turn of the body sooner to make it easier to head for first base. This shouldn’t be an advantage for a southpaw who starts out facing the wrong direction. Never did it myself, I was taught to go with the full follow through. For a well placed shot I’d kind of short arm it, but I wasn’t facing ML pitching. I’m always impressed with the ability of real ball players to control their swings.
“Wrong” is in the eye of the beholder. 
I’ve never hit left handed, but I assume a full rounding swing would be an advantage there, especially if you want to make being closer to first base count. It is a disadvantage for a right hander. You can end up with your whole body twisted around the ‘wrong’ way. It’s common to see right handers do a hop-skip kind of thing to take off.
In a swing you want to make contact just before extension. Extension helps you drive through the ball and not just pull off it at the point of contact. So as long as the hitter extends through the ball it doesn’t matter in terms of power if he lets go of the bat or not. Here is a new site i came acrossMotionSportsLab.com that breaks down swings frame by frame. Its free and pretty cool. Also has tutorials on its blog that explains the different part of the swing.
And Hriniak learned hitting from Charley Lau, the White Sox hitting coach before him. I grew up with a copy of The Art of Hitting .300permanantly open in the family room. Lau and Hriniak never specifically instructed hitters to remove the upper hand from the bat unless there was a good reason you couldn’t get full extension otherwise.
SDTim, I know a lot of slow pitch hitters who wrap their pinky around the knob and trust me, it’s pointless. As you say, all you do is lose bat control. If you think that gives you bat speed, just use a longer bat.
The key to homeruns in slow pitch, besides of course the equipment, is swinging up on the ball, as Ted Williams instructed.