Thats the problem there is not a clear code section@tortuga , I might not accept A if I was responsible for plan check but I don't know if I could site a proper code section. My only issue is what was mentioned previously, Those service conductors conductors are technically unprotected for that unspecified distance.
I think Wyane and Ben nailed it,
it should read
"The service disconnecting means shall be installed at a readily accessible location. If service conductors enter a building or structure, the service disconnecting means shall be located inside nearest the service point"
The gripe I have is utilities moving into NEC territory, requiring that unnecessary disconnect, imagine if the NEC put a requirement on the Utility side?
NEC service disconnects should be sufficient for all parties including the utility.