Unless someone has crash tested a stitch welded S chassis and compared the results to that of a factory welded chassis I don't buy the whole bad for crashing theory.
Crumple zones were developed to protect YOU the DRIVER. Unibody cars are a whole lot more fragile in a crash than a car with a body on frame design. Early unibody cars would break apart unpredictably and as a result the driver wasn't protected... A cars safety features are mostly geared towards protecting the passengers within that car, NOT the other cars on the road.
Stitch welding the chassis likely wont effect how the crumple zones work because crumple zones work by collapsing the sheet metal of the unibody NOT popping welds, even in a crash it's assumed that the factory welds will hold. Not to mention with a more ridged chassis the need for crumple zones is reduced since the chassis will act more like a traditional body on frame car, adding a cage will protect you even more.
One negative safety effect of stitch welding is the fact that crumple zones don't just make the car collapse predictably but they also make the car's chassis cushion your blow. Making it more ridged you will have much less "cushioning" in a collision.... then again your car will also likely suffer less damge... not much of a trade off IMO.
As for negative reasons for NOT to stitch weld... the biggest one I can think of is the added weight, all that metal your welding to the car adds up... I've heard that it can add well over 100lbs to the weight of the chassis.
IMO it's one of those deals where if you want to do it you'll have to strip the entire car down to the bare chassis then rip each and every seam clean and stitch it properly one at a time.
There are other things you can do to... FOAM INJECTION seems to be a really interesting technique for easily adding stiffness to your chassis without adding much weight (8lbs total). and it's cheap and relatively easy to do. It's a good enough of a technique that a lot of manufacturers are starting to do it from the factory on newer cars.
more info on foam injecting an S chassis:
http://forums2.freshalloy.com/showthread.php?t=162693
you could theoretically stitch weld AND foam inject...