it's illegal in the eyes of VOSA (and therefore insurance is invalid, and your car could justifiably be impounded if inspected)
Reason for rejection: a tyre not fitted in compliance with the manufacturers sidewall instruction
http://www.ukpoliceonline.co.uk/index.php?showtopic=24937 -> crux of the discussion based upon if the car would gain a certificate of compliance in the UK with stretched tyres, if the answer is 'yes' then they'd be legal? But I bet no sceneboys would dare SVA their car, because they know full well that they'd fail.
RobT's discussion about sidewall deformation, and heat build up is very real - feel your tyres after sitting at 70mph on the motorway for 20 mins - I bet yours are going to be nice & toasty compared to most (and yours in the wrong places)
Just because people do it doesn't make it right - it just demonstrates that there are still stupid people out there....
ahh right, valid point there, im going to do some more investigating( not to proove anything or anyone wrong though) just for myself