You'll need to think about what you mean by "safe" to get a sensible answer. Disallowing exec may restrict your hosting customers. Allowing exec may allow vulnerabilities to be exploited. Any hosting provider needs to strike a balance between the two.
IMO allowing exec in itself is not unsafe. If you allow cgi-bin scripts, then allowing exec is pretty much the same thing (there is no way to prevent a perl script from doing the same thing as PHP exec). You should depend on other security measures (such as file permissions) to prevent access of sensitive information (e.g. other users' home directories) on the server. I always configure PHP and cgi in su mode on shared servers, so allowing PHP exec is not a problem.