Jimmy,
If the gate isn't positioned right it could be bad, I agree.
After using it for a number of years and watching this setup with other climbers I don't see that it is an issue. If side loading was ever a concern changing to a shackle or screw link would solve the challenge.
As with most SRT issues there has to be more care and thought put into setups. In some ways SRT is way more complicated than trad climbing. There sure are more considerations that need to be addressed.
If there is a POW dedicated just for climbing I could see it being used. I've tried other belay devices with novice rope handlers. Every time they get something balled up or let the 'victim', usually a log, drop to fast because they've lost control. In every trunk wrap test the belayer is able to dial in the friction intuitively. The hitch stays on as a back up in case the belayer needs to let go of the rope for some reason.