There is nothing wrong with storing documents  at the portal  level, as long as they understand the limitations of doing so. You can’t add document  library level security in portal , so as long as their documents are ok to be viewed by anyone who visits the portal, it really isn’t a big deal.

Ideally, yes you want your files in WSS sites, but unless they need the added functionality  that WSS can provide, they can use a library in a portal area. I don’t think I have seen any Best Practice docs on this, as it really comes down to site  taxonomy and organization needs and requirements for content and target audiences.