I suppose it's an intresting way to look at it, but I also think its flawed.
Couple of points (personal opinion ofcourse)
1: I never indicate (cycling) going around a corner. I indicate before the corner so when I make the turn both hands are on the bars.
2: as a pedestrian I totally rely on cars indicating for me to negotiate crossing the road/path (see point4)
3: it's (unfortunatly) natural for drivers to fill any available gap... So I honestly think that removing indicators would not in any way stop car drivers driving too close.
4: as for not using them when there is no one about....this drives me mad. I was nearly hit by a car last year because the car did not indicate when turning into a corner while I was crossing the road. For whatever reason he didn't see me, but I saw him, and had he indicated I would have waited to cross. I personally indicate at all times, I don't see it as not a distraction, it's practically muscle memory reaction now.