I see the real issue as being the amount of service conductor in the building before the disconnect. If this is a meter/disconnect assembly, installed at the "nearest the point of entrance of the service conductors" (per 230.70(A)(1)) I don't see an issue at all.
As said above, it's a POCO (PSE&G/JCP&L) requirement; not NEC
Years back, it was 'common' to install meters inside (basement/garage). IMHO, one of the reasons is efficiency in reading the meters; think of the time saved!
Now, readings by infrared remote, and over data lines, and wireless are becoming common.
PSE&G green book is the place for their specs, and First Energy (JCP&L) website for theirs.
I have not heard the term 'meter pan' before, is that the term you meant to use or a spelling error? I have heard of meter cans. Just curious about the term use.