What is the case where you need to type lots of spaces? Usually tab is a better fit for this (not the tab character, but the tab button on the keyboard).
Typically, formatting plain text documents that aren't source code. I also want to use the tab key to make a tab character, though. I suppose that I could reprogram the tab key so that holding it down repeats spaces, but that's straying too far afield for my tastes.
I can see how this scheme would be excellent for some, but for me, I'm pretty sure that I'd be happier making the fn key something else.
I never want tabs in my files, as tabs render inconsistently across viewing apps. Tab characters are like nondeterministic spaces, so why would I use them?
Some things require tabs, like Makefiles. My editor (vim) is smart enough to know this when editing a Makefile and do the right thing.