Apple is making a bundle off their version of Publisher's Clearing House and they don't even have to offer a sweepstakes. And just like PCH is the snail mail version of spam, so is Newsstand. They ain't gonna get rid of it or allow you to do so.
As for sticking it in another folder where it's less intrusive and ugly, I doubt that you will damage anything by doing so. If you can, it means iOS5 is a far less robust OS than it claims to be. The advice not to monkey with Newsstand comes from a poster whose firm creates Newsstand enabled apps, so you may want to consider the source. But placing Newsstand in a folder is not a really satisfactory solution, either . If you happen to subscribe to a periodical that has been abducted by Newsstand you cannot access it outside of Newsstand (or remove it from Newsstand) and if you try to access it with Newsstand in a folder, Newsstand will crash. Best to just stick it on your limbo page and not subscribe to periodicals on the iPad. Apple is apparently requiring all periodicals to sign up for Newsstand so you soon will have no option if you want to subscribe to a periodical.