People use Data Islands for a variety of reasons - from managing multiple dates against a single (Island) Calendar to keeping a list of available Measures and Dimensions for a dynamic report.
I usually advise against using Data Islands, except for very experienced developers that know what they are doing, because of the terrible performance impact on performance that can potentially be caused by the incorrect use of the Data Islands.
It's hard to predict what's going to happen if you remove data islands in your data set, without seeing the application. You can use Document Analyzer from Rob Wunderlich (www.qlikviewcookbook.com) to analyze the use of your island Fields - that will show you what objects might get affected if you removed the corresponding fields.
Cheers,
Oleg Troyansky
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