A 2 family house has 2 60amp panels and I want to upgrade to 2 200amp panels. Is this over doing it

Excellent idea, however, adding more circuits thruout the home needs to be done also to be effective use of the service. Do it in phases as the budget allows.

Yes both 2 family homes will be fully rewired, so the question is from the outside, will #4/0 be OK to feed the dual 200amp service meters with disconnects, and then in to the 2 40 circuit 200 amp panels. Is this the right way to go about redoing the service

It depends on the load calculation of the two units. I have done this many times when the demand load was under 200A for both side combined.

I would like to reaffirm what Stan mentioned, a load calculation must be done to size the service entrance conductors you refer to. Without doing the calcs, we are only guessing, and that does not work.