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I don't think they need to stick out past the fenders (common Euro trend) but having them sunken in several inches seriously ruins the appearance of the car. I guess I should technically say IMO after that statement, but can honestly say that wheel fitment makes or breaks a car and that sunken wheels really do make a car look bad. Race cars/exotic sports cars/etc all have mostly proper wheel fitment, none of them are sunken in majorly.
Those S2000s are dope but seriously they all need 15-20mm spacers...I don't understand why they don't buy better fitting wheels since they already pay so much for the wheels they have! I know they have to modify the rear bumper to lower it that much.