In large cities, I can see the speed of cyclists on the side walk being a problem, but in small to mid sized towns? I think it's crazy to ask cyclists to ride on the road (which at least around here, is more often than not a major highway which happens to run through town), since there's never enough pedestrians to get in their way, and when they are, they can hop of the sidewalk and onto the grass to pass them. In fact, that particular reason is one I've never even seen before for not allowing cyclists to ride on the sidewalk -- around here it's all "well when you're driving you're not looking for someone on the sidewalk doing 25 miles per hour through the intersection," to which I always ask "what, were those people sleeping through bike safety in elementary school?"
You're supposed to get off and walk your bike through intersections. Do that, and as long as you're not living in some metropolis where walking is actually a valid means of transportation for most things, and therefore the sidewalks are always crowded (note that such cities generally have bicycle lanes, making this a non-issue even there), you'll be fine.
Edit: and another thing, which a poster above reminded me: why on earth does the law require cyclists to move with traffic, instead of against it and to the side of it, like pedestrians? It's friggin' idiotic to treat a human powered "vehicle" like a bike the same way you treat cars, trucks, and motorcycles. For a bike, 25 is pushing it. For a car, that's only a little bit faster than you go through a parking lot, and less than half what any halfway decent road has the speed limit set to.