It appears that using fixed width files is problematic in Tableau Prep - white space is compressed (e.g. five spaces " " or ten spaces " " all turn into a single space " ") when the connection to the file is made. This prevents successfully connecting to fixed width files and having a consistent record length. If that alone were fixed, then one could work with fixed length files using the MID() function to break apart the various attributes of data.
However, I would envision something even better where I could specify "Fixed Width" and be presented with a visual interface for drag/click defining the columns in the file.
For a real world use-case, see: Importing fixed-width text files