I am running the full length of the uncut steerer on my new 560S Sherpa with the stem one-half of one 12mm spacer below the top. The stem is set up parallel to the ground and allows the top of my drop handlebars to be equal in height with the Brooks saddle. The steerer is very stout; thick-walled and large diameter (1-1/8") steel. To put it in perspective, I am sitting atop a Brooks saddle mounted to an aluminum alloy seatpost with an OD of only 27.2mm and never give it a thought. The steerer/handlebars/stem bear much less of my weight directly. Small-wheeled Folders like the locally-produced Bike Friday use much longer steerers (or stems, as employed in their design) and suffer no problems with failure.
Regards,
Dan.
Eugene, OR -- USA