You can certainly use a higher rated regulator, although splitting current into 2 devices to share power load is pretty standard practice and not at all bad form - especially if increasing the regulator current would drive you to a heat sink! However, using the PWM to dim the LEDs will still save power if you keep the transistor in the circuit. Your intent was to make them the same brightness as the voltage dropped, which won't be necessary. But you could instead make them 1/2 brightness all the time with the PWM - and save 1/2 the power. Or any other ratio you choose.