I thought the same way, until I visited www.railbricks.com recently. Scroll down the home page to Anthony Sava's 13 July post. Jason Steinhurst has made a very small steam switcher with PF. Maybe an eight-wide cab diesel with a seven-wide hood could hide PF?
US railroads did use car body diesels for freights in the 1940s and 50s. Do a google search on Santa Fe blue bonnets or freight F-units as one example. Southern Pacific "Black Widows" and Northern Pacific freight F-units are much better looking in my opinion than the more brightly coloured passenger units. Having options for different paint schemes is always a good thing.
G