My friend has done it. I have not. There are 2 reasons I have not. 1.) I do the double binding, meaning I cut 2.5 inches and fold it is half, so that would be very bulky 2.) I don't think the flannel would hold up as well.
Someone made my great niece and nephew flannel quilts and made the edging ruffles made of the flannel. The quilts are now 7 years old and the ruffles still are okay.