A smaller blade is less dangerous but not safe. You wouldn't give a 3 year old a multitool with an exposed knife.
And the second part of the argument was that you don't need that utility all the time. 99% of the society can get their things done without carrying a knife around.
Thus someone constantly carrying around a potentially dangerous tool would look weird. I'm sure a hammer would also have great versatility but when you see someone casually lugging a hammer around you wouldn't find it weird?