That is an awesome solution! Everyone already has a forklift in the warehouse. Do you worry about the torque moment for extension? Clearly one can do the whole push a weight out in the opposite direction like cranes do, but I could see that interfering with turning depending on layout.
We mostly work with consumer goods that'll easily fit in one hand so that hasn't been a big problem for us. In our new video for ProMat (https://www.youtube.com/watch?v=g5i0dsQfPCY) </shamelessselfpromotion> you can see the sorts of things we pick. When people wander by our booth we encourage them to throw in their wallet or shoe or such to let the robot pick it. Not their briefcase.
Can humans work nearby? For example, is it sufficient that the pallet it sits on is bright orange & has warning signs to stay 3 feet away, or do you need something more elaborate?
In most setups we use collaborative arms from Universal Robots so that people can work right next to the robot. It makes development easier too. Our system does work with industrial arms that require those sorts of precautions, though.