In anyone's case, it's not a very good idea. Few 3-terminal regs are going to work well, and reliably, their performance will suck, if not put right at the device, even if they're OK, and by the time it's put together, BonzaiDuck could have just replaced the rack, or bought a decent 12V PSU.
Instability and/or poor performance could well mean killing drives, or any other controller chips in the way, via excess ripple and surges, and/or data corruption from voltage sags.
3-terminal regulators that can work at high speeds are either sensitive, and likely to become unstable, in a custom implementation, work poorly at lower than ideal frequencies (some won't even have specs that go below AM, same as the old regs don't have specs going that high--check page 35 of the datasheet from the reg in the instructables article, for example: it will make substantially noise towards 100kHz, and pass any coming in to your attached device, which is why the PSRR graphs for them usually stop at such low frequencies, as the downslope gets significant), or both. Mere inches of wiring can be the difference between working well and not working, too.
Modding the system as mentioned in the OP would probably be the safest and easiest thing to do. Else, get a premade PC-friendly converter board.
I'm studying your response, but am a bit confused, and wonder if you understand what I'm attempting to do. In the second para, you say "Modding the system as mentioned in the OP would probably be the safest and easiest thing to do." The first para is filled with cautions that I'm not sure apply, but I'm trying my best to understand. I could post pictures, but I'd either have to take them and upload, or copy from e-mail correspondence.
Here's a link to similar "Addonics" devices that more or less describe what I'm trying to mod into a StarTech hot-swap bay and IDE-to-SATA adapter:
http://www.addonics.com/products/saturn_hot-swap-kit.php
Startech and other similar IDE-to-SATA adapters are powered by the ubiquitous 4-pin floppy-drive power plug from the PSU; PSU's still include the patch cable for conversion of the standard 4-pin Molex. The adapters only use the 5V (red) and a black ground.
A 4-pin Molex feeds my hot-swap bay to power the drive and forward fans in the caddies. This fits the bay PCB shown in the Addonics pictures (the PCB built-in to the bay -- not the "IDE extender" or the two types of adapters (IDE-to-USB or IDE to sATA). There is a matching PCB in each caddy. Each of my caddies has a keyswitch, which either locks the drive into the bay and turns it on, or the reverse. This also turns the 5V and 12V on and off.
It is now fairly certain that the little white plug SIMILAR TO that called "power-sensing connector" on the Addonics bay PCB provides 12V, and that it is also switched on or off with the Keyswitch in the caddy. I must still determine if all these likelihoods apply to my own bay and caddy.
I had two identical IDE-to-SATA Startech adapters and did the stupid thing of assuming the white plug carried 5V, so the first of those popped and blew out as soon as I powered the system with the caddy locked in. Since bay was providing the power, there was no damage to either the bay or the drive. Only the adapter was destroyed. Similarly, no damage to the SATA signal cable or the controller at its other end.
so I have the spare adapter and some $2 similar units to play with.
This time, I'll be thorough and put my multi-tester on the PCB bay's white-plug to assure that it's 12V, but I can't imagine what else it would be. [There's always the possibility that it WAS a 5V connection and I had a defective adapter, but the empirical details suggest otherwise.] The UK techie says that his bay PCB white-plug powers a fan in the rear of the bay and is 12V; my hot-swap bay/caddies appear to be of SIMILAR manufacture, and the rear of the bay seems to have a place for a small fan. The UK tech verified that his 12V white plug is powered down by turning the caddy keyswitch, and I can similarly prove that mine either does or doesn't.
If all that proves true -- (a) the white plug provides 12V power and (b) it powers up or down with the keyswitch, then I only want to convert it to 5V to power the IDE-to-SATA adapter. If the adapter is powered up or down with the keyswitch simultaneous to the caddy/drive, then the problem of reboot and post without a drive connection to a powered adapter goes away.
So far, the consensus is that the IDE-to-SATA adapter only draws at most 500 mA -- possibly as little as 50mA. It is simply a matter of providing a "detour" of PSU power through the bay/caddy assembly which is controlled by the caddy keyswitch together with the power to the drive.
Now I've written all this stuff, and I know what folks are thinking: "Why bother!?" DOING IT should be quick and easy. NOT DOING IT leaves me only a minor inconvenience. TALKING ABOUT IT, RESEARCHING IT, DOING STUPID S*** like I did with the first of the two spare adapters -- that takes time.
And for their speed, even at SATA 1.5 through an SATA-III controller, these Hitachi 500GB IDE drives are only good for certain types of backups.