Not Heresy and done quite often. The only thing I would avoid are the uber high thread count sheets. The weave is so dense it might give you some difficulty needling, much like batiks can be a bit tougher to hand quilt due to their denseness.
I do know a lot of LA quilters don't like to use sheets because the longarm needle is much bigger than a regular SM needle and it can have a tendency to actually break the warp or weft threads of the sheet rather than sliding between them (on the super high thread count ones) . There is also a bit of disconcerting "thwock thwock thwock" sound with every stitch. But for handquilting you shouldn't have that issue.
Many here highly recommend using vintage sheets from thrift stores if you can find them.
I have used flannel sheets too!