Chain doesn't look that tight, but it's hard to tell from a non-driveside photo. I have my wheel about that close to the seat tube on my KHS track right now for street ratio (53x19) so that I can flip it around and run as low as a 53x15 for track training (read: not racing), I could probably even do a 53x14 but that would be one monster ratio. Just have to push the axle a few mm back to derail the chain, not too hard once you get the hang of it.

If I could figure out how to take a damn picture with my laptop webcam I'd post it... meh.