Long Term Friends with Benefits?

[Steve]

I've heard many people give the advice that you should cut off FWB at three months.

There aren't really any rules for the length of time you need to "cut off" a FWB type of relationship. The duration of the FWB relationship depends on many things, which you seem to have a good handle on, i.e., have you met (or are just dating) a significant other and a part of a long term relationship, is the FWB relationship becoming an obstacle to reaching other goals in your life, is the friend (or, vise versa, you) becoming too demanding or inserting himself into your life, etc. You sound like you have a pretty clear boundaries for this type of arrangement.

Is it bad I'm going to miss him a lot?

If he's a friend I'd be worried if you weren't going to miss him. That is part and parsel in my definition of friendship.

Is it dangerous ground to have bonded with this guy over sex, but to continue doing that for an extended period of time?

Not as long as you understand the boundaries of your relationship. I've known people who've grown into a loving monogamous relationship in such situations. Likewise I have known others who have ruined a good friendship with sex. Often what happens is that over time such relationships morph into just friendship sans benefits. If you keep perspective about your friendship and keep an open line of communication, you should be good.

We've become close as people, too. Is this just an amazing set up for an awkward situation of catching feelings for each other and complicating what could have been a great friendship?

That is always a danger. Step carefully. Keep the direction of the situation in mind: Do you want to take this to the next level, or do you want to keep it casual? Be aware of your comfort level. Talk to your friend if the situation starts to feel awkward, or if you start to develop more intense feelings. Don't be afraid to pull away if you need to. Likewise don't make this a placebo for a deeper level relationship. Communication in any type of relationship between people is a key factor to its failure or success.