Why SHMConfig is off by default
But why was it off by default? Because, as I said, the configuration data is exported to a shared memory region which is accessible to any user on the system. And while it contains a bunch of information that's not terribly interesting (an attacker being able to disable my touchpad or turn on two finger emulation may be a DoS of sorts, but...), it also contains some values that are used to scale the input coordinates. Which means that anyone with access to the SHM region can effectively take control of your mouse. The current position is exported too, so they can also track all of your mouse input.
Now, this isn't stunningly bad. The attacker can only do this while you're touching the pad. You'll see everything that happens as a result. There's no way to fake keyboard input. They need to be running code as another user on the system - if they're running as the logged in user then they can already do all of this. And for a device as single-user as Google seem to be looking at, it's obviously not a concern at all.
But there's still plenty of places on the web suggesting that you enable SHMConfig, and various distributions that ship with it turned on (Ubuntu on the Dell mini used to, but got turned off after I contacted them about it). It's absolutely fine to do this as long as you're aware of the security implications of it, but otherwise please use X input properties instead.