Are there issues with running user pods on a Kubernetes master node?

Running pods on the master node is definitely possible.

The security risk you mention is one issue, but if you configure service accounts, it isn't actually much different for all deployed pods to have secure remote access to the apiserver vs. insecure local access.

Another issue is resource contention. If you run a rogue pod on your master node that disrupts the master components, it can destabilize your entire cluster. Clearly this is a concern for production deployments, but if you are looking to maximize utilization of a small number of nodes in a development / experimentation environment, then it should be fine to run a couple of extra pods on the master.

Finally, you need to make sure the master node has a sufficiently large pod cidr allocated to it. In some deployments, the master only gets a /30 which isn't going to allow you to run very many pods.