the only problem with removing the knock sensor is that now the computer wont automatically advance and retard the timing based on fuel quality. because of this, there's the danger that it'll start pinging if it gets a batch of crap fuel. if there is too much pinging, you can burn a valve out, or the slight "knocks" will eventually crack something.
However, on cars of that age, the danger isnt great, as the timing will only advance so far, and fuel quality has improved greatly since then, so it probably wont advance far enough to cause a problem.