Demarites of Excavation adjacent to existing foundation?

It is quite safe to excavate right up next to a properly designed and built foundation of a 1- or 2-story house, as long as you first locate the gas, electric sewer and water lines, and take care not to break these.
The foundation wall receives a varying load from the fill next to it. When dry, the load is less; when the soil is saturated, the load is more. But unless you have a foundation on an extremely steep hill, or very close to a lake or ocean, or the water table is very high, you are probably going to be OK.