Hi John,
Coming to this thread late, but this topic is near and dear to my heart. What you describe is perfectly natural - you feel uncomfortable with shooting strangers because it is an invasive act - and because yes, it is dangerous to invade people's space (public or not). You could end up running from an attacker, losing your camera, or taking some verbal abuse. There are perils involved. I got tossed in jail in Russia in 1996 for a few hours while my family scrambled to get my passport and some bail (bribe) money to get me out - makes for a good story anyway...
On the other hand, in pursuit of photos that you find valuable, it can be really very rewarding to make something out of the chaos on the street, especially when you get that "one" image that anchors the portfolio.
That said, I really feel no one can tell you what your limits are. For me, I'll do whatever I have to do to get the shot, but what "that" is greatly depends on what I'm shooting, bearing in mind that as an amateur, no one is buying what I'm doing.
In your situation, I read some good advice from others - namely starting to shoot in publicly accepted scenarios where many other cameras are present, and also working on a theme. But what really sets your work apart, as GSN pointed out, is that gray matter between your ears. If you can bring your own personal experience - the things you know best into focus for us, then you will do unique work. "Do what you know" and "It takes guts to do great work" are two phrases I used to keep on my darkroom wall, and phrases I live by in my shooting. Frank's "Americans" is a perfect example - the reason it IS seminal, is that Frank was a disallusioned drifter while working on it - coming to America with foreign eyes and seeing us with poetic eyes that the commerical shooters and photojournlists of the day were missing. In short - he shot HIS experience, his feelings... just because we work with what's in front of us doesn't make us journalists. I worked for a paper for 6 months - fun job, but creatively fulfilling it was not. Just find something/someone or group you are interested in, learn more about them than they know themselves, and start shooting - the "how" will take care of itself provided you can work your equipment 🙂