The nature of the stream that you describe might limit the potential for numbers of larger fish but on a river capable of supporting a decent population of brown trout C&R definitely works.
On the Monnow there has been a general move to C&R on the catchment (that's the key - it's useless to limit to small stretches) and the results have been startling.
On my club water the largest brown trout reported in 50 years was 1lb 12oz (let's say 16"). We introduced dye marking for stocked fish in 2003, asked members to return all unmarked fish and to keep only dye marked fish if indeed they wanted to take any fish at all. We had an increase of wild browns from 25% of the total catch to about 40% of the total catch the following year. In 2010 this hit a new record of 67% wild fish within a record total catch. We have been able to reduce stocking by more than 50% whilst seeing no reduction in catches and we have many more larger fish with 25 fish of 16" or greater and 8 of these over 17" in 2010. We have had several fish of over 20" reported in the period since C&R was introduced and the club has an overall C&R rate of close to 90% including obviously many of the stocked fish as no wild fish are killed (at least not deliberately).
Now the majority of stock fish are dye marked, C&R is practised almost everywhere on wild fish and the whole catchment is seeing good numbers of fish over 17" and up to 19" or even 20".
What is happening is simply that wild fish are given a chance to survive for a few more seasons and reflect this in achieving their potential for size. In one pool during the 2010 mayfly there were at least six fish of 16" or more rising at the same time - almost impossible to imagine pre-C&R.
This fish could not have been caught at all under the previous regime and yet it was caught again (and returned again) four days later. That's got to be a good thing for the river.