Our countertop stone place is pushing us to do a 10.5" overhang for 21" depth chairs. Do you think that will be a mistake? We are already spending a lot of money so I would hate to have an un-usable sitting area.

Yes, it's a mistake and would result in very uncomfortable seating and also an inability to push in chairs fully. See http://starcraftcustombuilders.com/kitchen.design.rules.htm#rule9_namelink for industry best practices dependent on surface height. If your surface is table height, 30", an 18" overhang is recommended.

In case they don't know how to support this overhang properly, see http://www.countertopbracket.com/

You need at leadt15" for comfortable seating. With proper support designed into the island from the beginning.

You can buy inexpensive 90 degree angle braces from HD or lowes. Some more decorative than others. They will help stabilize your overhang. Your fabricator should also has some choices that he can install during installation of your slab.