The laws in Jersey say that "tires, front or rear, must be covered by some sort of body attached device." In short, something must be over the tires. As long as you have that, you could probably stick them out from lane to lane. I've seen a lot of fender flares, some with rubber mats running horizontal over the tires attached to flares, or in one case, mesh cage over the tires. Never heard of a problem with them. My guess is that something must be there to either "take the brunt" of an impact, or to eliminate water/mud/dirt/rocks from getting flung up way high and back and smashing some windshields or otherwise causing sight issues.
And Stusainte, there are laws here too about bumper height, and I've seen articles in off road mags about it. If it's too high, if you get hit by a low vehicle it's going to slide right under you and get chewed up, or it goes right into their windows and does some serious damage. Basicly, the law is bumper-to-bumper is how it's gotta be. The bumpers are a safety device for us and them. I'd much rather lose a bumper and tires than have the weight of someone sliding under my truck and not coming back out alive on my conscience.