With Wallace we can have a great defender on the opposing team's SF and put LBJ on their guard.
Example: Against the Celtics you can have Wallace on Pierce and LBJ on Rondo while Delonte/Mo/Boobie chase Allen around.
or
Against the Lakers LeBron will take Kobe while Wallace can guard Odom, Ariza, or one of their foreigners in crunch time.
This would not help spacing, but might not be bad if he's off the bench. We are running small ball a LOT. So putting Wallace at the 3, LBJ at the 4 (or other way around), and a couple of shooters at the guards allows for some spacing, an athletic freak inside, and a lot of finishers together at once.
I'm not positive Wallace wouldn't hurt things when it comes to shooting, but his defense and explosive place could be well worth anything he offsets.