I should clarify that I'm using Chipmunk on the iPhone, but without the Obj-C wrapper. When the 2 objects intersect, the app freezes and throws: EXC_BAD_ACCESS. The compiler says some code in cpArbiter is what caused it. At first, I thought I was trying to remove objects twice, which is why the if statement. However, that didn't help.
To answer your other question, there is no reason why I couldn't just remove the whole space, besides the fact I thought it would be faster not to.