Apart from aesthetics, there is a real good safety reason to have wheel covered at least to centerline of axle
When wheel is exposed like that anyone toucjhing or falling into it when moving can easily get 'sucked in' to closed area causing worse damage than if they fell into a stationary area.
If your never riding around town where there may be pedestrians it shouldn't be an issue, but, there may be various 'exposed moving parts' that could get you a ticket. A lot depends on the cops in your area