Stepper motors as encoders

I am thinking of playing with stepper motors as shaft encoders. Has
anyone had any luck with this approach?

In practical terms, 100 pulses per revolution is the best resolution
which would be available. The main virtue of this approach would be
low cost, since .9 degree/steppers (which give only 100 ppr) seems to
be the smallest step size widely available from surplus sources, where
they are available in the $2 range. The electronics to interface a
stepper so it outputs 5V pulses is cheap - 2 comparators, and a few
R's, C's and diodes, plus a 5V power supply.

Any comments? Would 100 ppr have any value with DRO's? Of course
greater resolution could be achieved mechanically.

Grant