It seems reasonable to me that the alternate orientation could certainly work, although I haven’t gone and tested it myself 
I can see what you’re imagining it terms of your setup and I think that it would be very cool. The reason I opted for the orientation I did was simply because I imagined that despite the increased weight, holding the whole gantry assembly up in an even manner by two motors sharing the load would be more reliable in its operation than by the single X-axis motor, though admittedly I never did the math on whether this assumption was correct.
In terms of your question regarding dust falling into the rail, you should know that although the traditional configuration of the LongMill has the lead screws facing inwards, I actually designed the machine to also have the aluminum rails on the inside with the lead screws pointing outwards as well in case anyone was particularly nervous about the dust and was willing to sacrifice some of their cutting area. Another admittance is that I have yet to assemble it in this configuration, although I figured I’d mention it to you in case you were interested and wanted to give it a shot 
In terms of the Z-travel of the cutting tool, it’s travel can be wholly restricted based off how you place the router and the router mount. Since the Z-axis has a travel of 4.5 inches, but the X-axis rail has a clearance of only about 4" if your work surface is the same height as where your feet are mounted, then it’s very possible to cut through the material and out the other side if you were to make a mistake. However the router mount can be placed at two distinct heights, one which is closer for the use of smaller engraving bits and thin material, and one which is further for more general use; as well as the router itself can have a varied height in its mount based off how you place it. So, ultimately, it should be easy enough to position the router in a way that the router bits shouldn’t be able to plunge through you wasteboard.
Your setup idea sounds good, though I’m certainly not as experienced a woodworker as some of our other community members here 
I did point another community member in the direction of someone on our FB group who I know has been running his machine vertically for a while now in this thread here:
So maybe they’d have some other pointers to offer up?