There's nothing wrong with having project files
stored on a server, as long as you're working your project
on your local machine.
As to the "networking" you mentioned, I suspect that your IT
folks have decided that not all the WebHelp output files need to be
copied from location to location. (You know, like those pesky wh*
folders, for example, which contain all the TOC, Index, and Search
stuff?)
Good luck,
Leon