But it's a steering wheel. What could go wrong with it?
As a note, one of the most delicate pieces of equipment in a certain generation of cars was the stick that came out of the side of the steering wheel. That's because it had been designed to control the headlights, windshield wipers, and often cruise control as well. Too many little fiddly electronic bits in there.
Even outside of that, the steering column contains the ignition switch (not necessarily a bad thing to have stop working while you're driving, but definitely a bad thing to have working erratically). In most modern cars, it also contains an air bag (definitely a bad thing to have working erratically). Basically, the steering column on a car is a little more fiddly than, say, the steering wheel on a go-cart.
OTOH, based on the thread Simon linked to, it would seem that you're right about the drive train. The circle would only go up and down far enough to enclose the driver. So, you'd have to worry about the steering column, and a good chunk of the dash, but the rest of the car might be ok.
Ultimately, I think this is one of those cases where, even Bob would suggest actual experimentation over theorizing. We're treading on some hazy lines of magical theory, and it's hard to really say where they'd fall.
Personally, though, if I were GM, I'd disallow using a circle to protect the car from the driver. That's just the side I come down on.