It works, but you need to make sure the keg lid is seated first. I have a couple that won't seal until they're hit with 20-30 psi for a few minutes. If you add the sugar without sealing the lid all the CO2 will just escape as it's produced.
Personally, I'd think it's all downside. Force-carbonating with CO2 is faster, costs about the same as the sugar, and leaves less sediment.