The old addage good (soul) music is good (soul) music stands true and my take has always been that Northern Soul was/is majoritively made up of danceable underground black American music - and the Northern scene has always been progressive (hasn't it? )!?
I wouldn't ever want to see SH played in a 60's/70's Xover room really - the feel is different. But I do think it, very obviously, has a place in a Modern room - because that is what it is and what the term 'Modern Soul' was coined for, currently/recently issued soul music with a 'superior' (arguable I know) production quality.
The biggie SH tracks I read get played at niters do tend to be the obvious choice, there's so much more out there, as someone above quite rightly pointed out.
I know this is a bigger subject/converstaion than I have time to give it inbetween jobs at work but I don't see SH in any eradicating certain forms of traditionally played all niter tracks, just adding to them and possibly bringing in some much needed new blood to this scene. It can only in the long term add.