What would be the consequence of...
 

So long as you left the same amount of wing area, it would just be less stable on the roll axis, and the ailerons would be more effective.

go for it
 

The only way to know is to try it.

What would be the consequence of...
 

If you do it...
Extend the ailerons out full span. You'll want the added roll authority.

It will fly. It will lose lateral stability, and require a better pilot than the stock version. The rudder will become MUCH less "effective" (It'll still yaw as much, but won't induce the roll and may induce a pitch down)

I cut the dihedral in half on a Lil' Poke (mini of the same design) and the results were 100% good, 0 % bad. :) Rudder still has more roll authority than the ailerons... so it needs the dihedral reduced more.

I think that you could also go to 5 ch using the center panel control surfaces for flaps and putting ailerons out in the end panels. Another interresting experiment to try. ;)