Does'nt that put the arrow behind the hand and therefore magnify any inconsistances in grip and form?
Yes, that is the theory. Although it's not so much arrow length as it is rest position. For instance, if I shoot a 32" arrow on an overdraw, the pivot point is still behind the riser. This is why overdraws are such touchy critters to shoot.
I can't say how far behind the grip the rest has to be before the difference is significant.