|I'm not racist, but most of them are halflings|
Well - need it be said? Good riddance.
I was in Barcelona last summer during a wave of pickpocketing. Constant reminders on the subway, from hotel personnel, everywhere. Paranoia undercutting our enjoyment of one of Europe's most amazing cities. My wife had a compartment on her backpack (thankfully empty of anything valuable) opened by stealth. Not much desire there to applaud the exquisite art of the sneak thief.
You know, I also feel the same way about the "pickpocketing" skill in roleplaying games. Even when expanded to "sleight of hand" to allow minor conjuring tricks, it's a basically antisocial skill. It screams out "Hey! Thief! Go off and have a solo adventure!" While whispering "Psst! Thief! Care to try your skill on your fellow party members?" Note-passing campaigns with stealth player vs. player action may be fun to run online, but at a tabletop I see that kind of action as a pain (but see also JB's somewhat different take on the whole issue).
And yet ... if you have a character who is a thief, he or she just might have been trained in this very exacting skill. My solution is to treat it as part of the 1-3 background words a starting character gets in my Old School Players system; so if you choose "thief" you will get a minor chance to pickpocket, ruled on the spot, and if you choose "pickpocket" you'll be quite competent at it from the start. I don't want pickpocketing to be at the center of the campaign but it's fine as flavor. Maybe if the game revolved more about intrigue and capers things just might be different. But in my dungeon-bashing game, there ain't no need.