Well, I see nothing wrong with it. It is a rhetorical device known as ellipsis, which involves the removing of expected words for effect.
Why is it not only correct but actually good? Ward Farnsworth ascribes these traits to ellipsis:
- a. An ellipsis involves the audience in an utterance; the reader or listener fills in the missing language, consciously or not.
- b. Missing words sometimes are a small surprise. The result may be a moment of emphasis on whatever was omitted.
- c. The omission of words can create a sense of brevity, energy, and elegance.
- d. Often an ellipsis occurs because a later phrase borrows a word from an earlier one. The effect of this can be to tie two phrases together more snugly and strengthen the link between them.
I submit that
That looks like fun, but dangerous.
at least employs the effects described in (c) and (d) above, and probably (a) as well. And as the meaning is understood immediately by all but the slowest or most obstinate minds, there is no harm done to the sense of the communication. What else could "dangerous" possibly refer to but "That"?
Also, it's much better than filling in the missing words:
That looks like fun, but looks dangerous.
or, because now fussiness has taken over, the left brain will cry for more words to be added to nail it all down even more:
That looks like fun, but it also looks dangerous.
Neither of these improves the original. One might say the latter slowly, using extra words to make sure someone (a child perhaps) got the meaning crystal clear, but in most cases such over-emphasis would not be necessary. Making something longer does not necessarily make it better. As Pascal once wrote to a friend, "I have made this letter longer than usual because I lack the time to make it shorter."