yes it's legal to sit on the causeway - or at least we've never been arrested in 4 years! At times it gets really packed. The locals ride over it on their mopeds.... and it's only about 2 feet wide!
I have lots of favourite locations in Corfu but the end of the runway (on a Monday or Friday) is probably in the top 2. I always duck when the planes come in, they are so low you just can't help it!