Yes, they could steal the front wheel, but it's hardly worth the effort. It's difficult to sell, and you can't get away quickly.
That doesn't seem to be the case where I live (South-central Indiana). It's common to see abandoned bikes locked to the rack with the front wheel missing. I once went to the public library for an hour and came out to find my front wheel had been stolen. I'd rather lock my frame and front wheel than my frame and rear wheel.
Spacing is one reason. While you may share a stand with someone else, the next stand is going to be two to three feet away. I don't have to untangle my bike from other bikes, and I don't have to worry about damaging the bike of somebody else.
Support is the other reason. Bikes are easy to knock down and relatively easy to mangle. There is a reason why the article referred to some of the racks as wheel benders. I have also seen bikes that were mangled by cars after falling onto the street. That's not a concern with the Sheffield stand.
Then there are the other indignities, the most common being improperly installed stands. My current favourite though is how my city installed some post and ring stands, then used them to secure signs for a construction project. (The irony is that cyclists now have to secure their bikes to sign posts that are secured by bike stands!) Whenever parking is reduced due to construction, city hall hears about it. Whenever a bike stand is rendered useless, cyclists are supposed to be grateful for what we have.
As for the space requirements for the Sheffields, the least efficient arrangement that I can think of would still handle six bikes in one parking spot. When you factor in the amount of space used by aisles, which don't need to be as wide for bikes, the average will be closer to 17 bikes per parking space. That is not much of a sacrifice. Indeed, it would free up a fair amount of space. Space that could be used for homes, businesses, or even parkland assuming that you could convince people to bike instead.
(I did some quick arithmetic: two parking spots separated by an aisle is 450 square feet, or the size of a small apartment. Managing to eliminate 25 parking spots is the equivalent of freeing up a quarter acre lot, which is sufficient for detached home and yard.)