Just spoke to a Suspension place and coilovers are NOT illegal just as long as you don't go too low BUT the problem is the ride quality goes out the window, unless you spend like $6k on them. I can get a 'normal' set up with lower but legal springs and German shocks (Used on top German cars like BMW) for less that $1k. No I won't have adjustable suspension but it will be low, about 1 inch from the current 2 inch gap between the top of the tires and fender. The ride will be usable on normal roads and I won't get stuck on driveways. Also it will have less body roll so better in corners than the standard setup and should be better under brakes without it pitching forward when braking hard.
I just can't see using coilovers for my daily ride at this point, if I was making a track car then I'd say yes!