Interesting question that you pose. In that we are generally a self-policing activity, it has to entail a degree of responsibility on our collective parts. And often, being responsible means ticking people off. To address your question "Do I recommend archiving?", I think you just did. To log it as such, I would like to think that an experienced and responsible cache placer would understand the issues surrounding the placement. A lesser experienced placer hopefully would heed the experienced.
My view has been that when I seek a cache that turns out to be either too close to private property or there is not a clear delineation of where private ends and public starts, I pass on the cache.
While I can't comment on the cache that your discussing in that I have not been to it, common sense goes a long way.