I would not do this if you have many VMFS meta data changes (VM creations, deletions, power cycles ...) on the DEV system. Each will cause SCSI reservations which can have a bad impact on the PROD system.
Is this a dev-ESX server or ESX server dedicated to development machines?
Either one is technically feasible, though I wouldn't unless I had no other alternatives. The second scenario, I don't see much of an issue with as long as you have a seperate LUN and VMFS datastore allocated to the server.