I'd rather see replicas. Not because the old planes are somehow unsafe, but because they have historical significance and they ain't buildin' no more of them.

But even clean-sheet designs can crash and burn:
http://en.wikipedia.org/wiki/Scaled_Composites_Pond_Racer#Problems_and_tragedy

Not one of Burt Rutan's finest days. As far as spectators being so close to the race course, no one forced them to attend the races. Perhaps have a rule requiring people under 18 to stand further back.