Enocders and stepper feedback method?

Anyone ever consider something like this?

1)Have an 8 bit counter that counts both the encoder outputs and the
requested steps.

2) start the count at 128

3)If the ratio of encoder(x4) to stepper pulses is for example
(2.5pulses/step) and if cw rotation is considered positive add 5 to
the count for each cw stepper pulse requested, subtract 2 for each cw
encoder count received.

4) If the count gets to 130, ( >1/2 step ) step the motor 1 step CW.
the same for ccw, if < 126 step the motor ccw.

No need for a 32 bit counter and you still could have up to 24 steps
missed and it still catch up. It would seem lots of ratios of encoder
to stepper could be used by just changing the values for both count
increments and the up and lower step points.

I am trying to figure out how to do that with a PIC chip. The problem
I see is the random timing of the pulses would likely end up loosing
a step now and again. I will likely need a pic and another chip.

I just wanted to bounce this off the list, to see what you guys thing
of the general approach. Sound like a reasonable thing to try?

Dave WC0H