Given it's size, can someone please explain why kiting is not allowed on Sydney Harbour? Obviously, one would not go kiting in Circular Quay, or near naval/shipping lanes, but it just seems crazy that such a big mass of water is out of bounds...

Rose bay has it's problems:

not big enough launch area
kayaks, sailboats
people's kites have previously gone into residents houses
even for a highly skilled kiter, too many obstacles to have fun

As for the harbour.......go and talk to the fishermen down kirribilli/milsons point and they'll tell you the toxins in the water prevent them from eating their catch. Harbour is a filthy place.....have you not seen Nemo?!!!