Rebalancing is actually a good idea for two reasons. One, if you had a target asset allocation for a good reason in the first place, you want to keep to it. If you want 50/50 stocks/bonds, and your stocks double, then suddenly your portfolio is a lot more stock-heavy and volatile than you want. Two, it's a rules-based method of buying low and selling high. You're basically unloading things that have just done well and buying things that have just done poorly, which assuming some sort of regression to the mean means you're making a trading profit on net.

The average retail investor shouldn't rebalance more than perhaps twice a year, outside of extreme volatility. As you say, fees start to eat the rewards of the strategy if you do it too much. Personally, I rebalance with newly-invested funds - no trading fees, just use the new money to return to the strategic allocation. My investments are a high enough portion of my portfolio to make this easy, though, which may not be true of everybody.