The chain oiler aspect, I think, is probably not the reason to do the mod. Apparently, the type of oil discharged onto the chain is not the best type of lube for the chain, it is not discharged in the type of volume needed toactually do anything substantial except attract dirt and grit. I've read that routing it aft and having it drop behind the wheel is probably the best way to go. As to it being a danger to other motorcycles, again, we're talking a small volume of oil, here. Probably not enough to make any difference whatsoever, but I could be wrong.
As to why the catchcan system was added in the first place, emissions controls. direct venting of crankcase vapors to the atmosphere is, apparently, a huge sin.
Again, this is based upon my reading.
Mike