Arduino GPRS shield caught fire

I can't think of any negatives to this approach but if I am missing something I hope someone will tell me.

One thing to be careful about when two or more sub-systems use separate DC voltage sources is what can happen if some of the voltage sources are turned on and some are turned off. Current can flow to/from input pins in unpowered parts and even pretty small amounts of current can damage clamping diodes and such.