Yes, it is one of the oldest methods of binding--you see it quite often on antique quilts. Not a good idea to do this on a quilt that is going to get a lot of wear and cleaning. The binding just doesn't hold up as well.
Usually it is ok to use on wallhangings.
I have a wallhanging I am ready to do self binding. It has been hand pieced and hand quilted and I didn't want to use machine applied binding. I guess I just want to be able to say I did it ALL by hand.
Good luck
Chris