This strikes me as a potential security issue. With all users sharing a single cache directory, secret, personal, or private documents may be exposed to other users...

"With all users sharing a single cache directory"....
Sorry - but this is not the case. It is only Acrobat using a directory which is now (exceptionally) physically located on the local harddrive - not on the server over the network anymore. Acrobat is storing (as far as I have evaluated) 2 files inside this "shared" directory: "AcroFnt08.lst" and "Organizer70". Both files are rather meaningless.

Again: All other apps remain untouched and all other caches are still inside the user directory on the server!

It seems that Acrobat is still (bug since version 7) unable to get its cache managed over a network connection, which results in a significant system slowdown for a few seconds, ending with this error message. I can tell you - it is relieving to get off this stupid behaviour.