I'm not going to comment on the ethical or safety portions of it, but i will tell you that you can grow plants that small and get a decent yield out of it. Check out this thread from a previous grow that I did:

http://boards.cannabis.com/showthread.php?t=63244

Those were White Widow seeds, that got trained very early with a lot of pruning. I never went bigger than the 9" pot that they finished in. They were done under a 250 watt HPS, and I ended up getting about 5.5 ounces dry weight out of them. It isn't a lot, but they were small and surprisingly had very little odor. Not to say that yours wouldn't have the same odor even if you went with the same strain, I guess I just got lucky. The smoke was quite good as well as I was able to unload it for 400$/oz for 4 ounces, and split the rest among friends. If you PM me I will go into more detail about how I trained them to be that small. As for the rest of the issues, you are on your own I am just here to tell you that you can have plants small enough to fit in a small area.