Oh yeah...freaked me out too...that is the factory route ya know...see how it is hanging loose too?
I pulled it entirely, replaced it with 8-AN hard line and fittings, then some braided up to the engine compartment. I still have to pull the sending unit and have the 3/8 outlet replaced with a 1/2 though. I'm still considering having an electric fuel system, haven't yet since I'm staying with the carb for the foreseeable future and all.
Here's some more pics of the improved fuel line and routing:
http://www.edbert.net/fuelline.htm