I've heard that by drying them you lose most if not all of the psilocyn in the shrooms, thus decrease it's psychoactive properties. Is this true?
No that is not entirely true. If dried right, aka fan dry for 24 hours, than dessicant dry after that, you will lose very little if any potency, if u were however to dry ur mushies using heat, seeing as heat denatures the psychoactive chemicals, than yes you will have decreased potency. Eating fresh shroomies is a slightly stronger trip, but if dried and stored properly there shouldnt be too much of a difference.
The advantage is for people who have more mush than they can consume in a week, mushrooms rot very quickly when fresh and once they rot their useless, so for anyone who grows or buys in bulk or hunts in bulk it is important to be able to store them for months, if dried and stored properly this is possible.