Homemade item -- is this broken? would you allow this in y..

One of my players would like to have this item. He devised it himself.
He wanted something like a bag of holding that wouldn't explode if
brought into a Rope Trick. I told him my house rule is that bags of
holding can be brought into Rope Tricks, but he still wants this. I am
a newbie GM, and I would like to know if anyone sees anything broken
about this. I don't.

Pouch of Items
This appears to be a common, if well made, belt pouch.
The pouch of Items looks like a regular belt pouch
filled with small cloth items. It can hold a total of
15 items at a time.

Weight .5lbs, Cost 8,100gp.

This pouch enables you to cast Shrink Item, unlimited uses. You can
also cast this on magic items, however (as of a Greater Shrink Item
spell). Whoever has possession of the pouch can use it. The
restrictions are:
*Only 15 items can be shrunk at any given time
*14 cubic feet is the maximum size of any given object to be shrunk

Shrink Item

Transmutation
Level: Sor/Wiz 3
Components: V, S
Casting Time: 1 standard action
Range: Touch
Target: One touched object of up to 2 cu. ft./level
Duration: One day/level; see text
Saving Throw: Will negates (object)
Spell Resistance: Yes (object)
You are able to shrink one nonmagical item (if it is
within the size limit) to 1/16 of its normal size in
each dimension (to about 1/4,000 the original volume
and mass). This change effectively reduces the
object's size by four categories. Optionally, you can
also change its now shrunken composition to a
clothlike one. Objects changed by a shrink item spell
can be returned to normal composition and size merely
by tossing them onto any solid surface or by a word of
command from the original caster. Even a burning fire
and its fuel can be shrunk by this spell. Restoring
the shrunken object to its normal size and composition
ends the spell.
Shrink item can be made permanent with a permanency
spell, in which case the affected object can be shrunk
and expanded an indefinite number of times, but only
by the original caster.


Greater Shrink Item
Level: Sor/Wiz 4

Other than the above and the removal of the word
nonmagical from the first line of the spell
description the spell is the same as above.

Yeah, the Rules of the Game article is why I made the house rule. I
showed him the link, but for whatever reason, he still wants the item.
He's played with it before in somebody else's campaign, so I think the
reason he wants it is that he's used to it.

Some uses that he's suggested to me (that he wants to use it for): To
store a burning campfire; to store a complete gourmet meal, freshly
made; to put found gold or treasure into a chest and shrink the chest.
He hasn't brought up combat issues, but I will discuss with him the
limitations you've mentioned and see what he thinks. Thanks for the
input.