Has the wire/kevlar bead actually separated from the tire, or is the stuff coming off in the pic just the excess rubber below the wire/kevlar? I don't think that bit of excess rubber actually serves any purpose. I have had it peel off when removing a tire with no ill effects after remounting.

This occurrence does scare me a bit. I have a pair of 26x1.5" Marathons with the new tread on my LHT, and it would be bad news for a tire to suddenly blow out when carrying a load.