Pinned barrels didn't need to be screwed into the frame nearly as tightly, which reduced stress both on the barrel shank and on the frame.
It's not uncommon to see an S&W revolver with a bore that exhibits a compression ring from being cranked into the frame.
Supposedly handguns from the first couple of years were also prone to cracking around the frame boss where the barrel screwed into the frame, but I've never seen this.
Dropping the pinned barrel is really no different than many of the other engineering changes that have been made to S&W revolvers over the years, except that it's a lot more noticable, and it can lead to occasional problems.
As for shooting a pinned barrel loose, yes, it's certainly possible, just as it's possible to shoot an unpinned barrel loose.