With allow_url_fopen = Off Piwik Proxy doesn’t work. If you search on this forum, you’ll find many people with this problem.
allow_url_fopen is very dangerous, for this reason it’s often disabled by default and many hosting refuse to turn it on for security reason.
The solution is to rewrite the script using cURL.
It has already been done by user tvanerp who posted the solution on this forum:
http://forum.piwik.org/read.php?2,88408,page=1#msg-90286
I believe that Piwik Proxy should use cURL by default, so I’m asking you to implement the solution posted above in the next version of Piwik Proxy.
It’s far more safe and it will solve problems for many people.